SHIB tries to rebound, but buyers still face major test

Key Points

SHIB is stable above the trend line that was broken on July 21.

The US$0.0000435 region remains the first important resistance test level. Isolows near $0.0000405 continue to support the forming bottom. The RSI indicator is improving, but trading volume remains sluggish. SHIB remains below all three major moving averages.

As of writing, SHIB was trading at approximately US$0.000042, slightly above the previous resistance line around US$0.0000418. This trend provides buyers with the opportunity to continue the rebound, but a broader trend reversal has not yet been established.

Prices are still below the 50-day, 100-day and 200-day simple moving averages, while volume has shrunk for about three weeks. Therefore, the current pattern is still conditional: holding the breakthrough level may maintain the momentum of recovery, but it will require SHIB to break through recent highs with greater participation to gain further confirmation.

Breakthroughs still need to be followed up

Since the local high on July 4, the downtrend line has connected a series of lower highs. Breaking through this trend line interrupts this sequence and marks an early improvement in the short-term structure.

The next question is whether the front resistance level can start to serve as support after a successful backtest. As long as the SHIB remains above approximately US$0.0000418, the breakout pattern may remain intact and allow another attempt to hit the July 15 highs near US$0.0000435.

If the daily line closes below the trend line, this judgment will be weakened. Prices could then fall back to platforms near $0.0000411, where buyers have previously tried to stabilize the market.

Therefore, the breakthrough itself is only the first step. Markets still need evidence that demand is strong enough to push SHIB above levels that previously hindered a rebound.

Why US$0.0000435 is the first important test

The July 15 high near US$0.0000435 is more meaningful than the trend line because it represents a swing high seen in the near future. Breaking through the area may indicate that SHIB is beginning to replace its recent model of lower highs with a more constructive short-term structure. It would also bring the downward 50-day simple moving average (approximately $0.0000447) into view.

The next resistance level is around $0.0000458, where the recovery on July 4 was blocked. If the daily closing price breaks through this level, especially with stronger trading volume, it may provide clearer support for the double bottom pattern formed by the two reactions of US$0.0000405.

Until these levels are recovered, the current trend remains a contrarian breakout in a larger downtrend rather than a confirmed trend reversal.

Low points support the formation of a bottom

SHIB has tested the US$0.0000405 region twice without hitting a lower low. These reactions outline possible double bottoms and constitute the horizontal bottom of the current structure. Repeated defense suggests that selling pressure abates near chart lows. But this does not guarantee that the bottom will continue to be supported or that the shape will be completed.

To make the double-bottom pattern more convincing, prices need to break through the resistance level separating the two lows. The area near $0.0000458 provides the clearest confirmation reference for this. Previously, the structure was more appropriately described as a bottom-building attempt. Equal lows prevented further deterioration, but buyers have not yet created decisive higher highs.

Momentum is improving, but volume is missing

The Relative Strength Indicator (RSI) is close to 42.5 and is starting to rise after forming a bullish divergence. When prices returned to the same support area, the RSI hit a stronger low. This may indicate that bearish momentum was weakening during the second test of $0.0000405. This indicator is still well below the overbought area, and if buying pressure increases, there is room for further improvement in momentum.

Volume provides a less convincing signal. During the formation of the triangle, trading activity gradually decreased, while trend-line breakthroughs have not yet been accompanied by a significant expansion in participation. Shrinkage in volume is common during price compressions, but stronger activity will make any move beyond $0.0000435 more credible. Otherwise, SHIB may continue to hover near the breakthrough area and be unable to establish a lasting rise.

Where the recovery may fail

A daily close below US$0.00000418 will bring the SHIB back below the trend line where it was breached and increase the risk that a breakout could be temporary. The first downside reference level is around US$0.00000411. Holding on to the platform may still make room for another attempt at recovery, but the technical form will be weaker.

The more important level remains $0.0000405. Confirmation of a fall below this level will break such lows and destroy the horizontal bottom of the falling triangle. This result could move the structure in the direction of a larger downtrend and set a new low below $0.0000405.

Shibarium development may affect market attention

Price movements are also moving in tandem with the continued development of Shibarium (the Ethereum Layer-2 network of the Shiba Inu ecosystem). The official Shibarium browser shows that the cumulative transaction volume exceeds 1.5 billion. This figure measures total network activity, but does not in itself indicate how much demand will be transmitted to SHIB, or whether activity is growing at this stage.

The ecosystem is also committed to integrating fully homomorphic encryption (FHE) into Shibarium. FHE is designed to allow calculations on encrypted data without revealing the underlying information beforehand. The official Shib.io roadmap includes a FHE-based version of Shibarium, and its developer page states that the integration is expected to use technology provided by Zama. These pages do not list specific activation dates. If a confirmed timetable or implementation update is announced, the development may attract more attention, but its impact on SHIB will depend on whether it translates into additional usage, demand, or market participation.

The larger trend is unclear

Breakthroughs in the trend line have improved the short-term shape of SHIB, but the broader chart remains bearish. Prices remain below all three major moving averages, and each average is above the market, posing potential resistance.

At present, SHIB has only experienced an early breakout against the trend, rather than a confirmed reversal. The next stage may depend on whether prices can hold on to previous trend lines, attract stronger volume and break through recent highs.

This article is for reference only and does not constitute financial or investment advice. Cryptocurrency strategies that generate revenue carry a risk of partial or total loss.