Shiba Inu (SHIB) Price Pops as Falling Wedge Ends and Exchange Inflows Plunge

Key Takeaways

• SHIB has broken out of a falling wedge pattern, signaling a possible bullish reversal after dropping from $0.000015 to $0.000012.
• On-chain data shows SHIB exchange inflow has plunged from 7 billion to 1.21 billion coins, indicating reduced selling pressure.
• SHIB is trading in an ascending channel on the daily chart, with the Chaikin Money Flow (CMF) confirming increased buying activity.

After a downtrend in late April, Shiba Inu (SHIB) has recently printed bullish candlesticks, indicating the potential for a sustained uptrend. At press time, SHIB’s price has moved closer to $0.000013.

But are other indicators backing this trend? In this analysis, CCN explores why SHIB’s price is poised for further gains, following a modest 3.31% uptick today.

SHIB Moves Away from Bearish Trend

According to the SHIB/USD 4-hour chart, the memecoin has broken out of a falling wedge. The falling wedge appeared after SHIB’s price declined from $0.000015 to $0.000012 between April 26 and Tuesday, May 6.

On the same Tuesday, the volume around the memecoin increased amid buying pressure. As a result, SHIB’s price broke above the upper trendline of the falling wedge.

This breakout invalidated the bearish outlook. Following the price increase, CCN observed that the Awesome Oscillator (AO) reading has begun to flash green histogram bars.

Although the AO remains in the negative zone, the shift from red to green bars suggests that momentum is transitioning from bearish to bullish. If this trend continues, the AO could eventually cross into positive territory.

If validated, SHIB’s price could rise toward the upper trendline of the wedge, potentially revisiting the peak from earlier in the trend.

Selling Pressure Drops

From an on-chain point of view, Glassnode data shows that SHIB’s exchange inflow has plummeted. Exchange Inflow refers to the amount of cryptocurrency transferred from external wallets to exchange wallets.

High exchange inflow suggests potential selling pressure as holders may prepare to sell or trade for fiat or other cryptos. Low Exchange inflow, on the other hand, suggests users are holding or transferring to private wallets.

If sustained, this translates to less selling pressure. On Monday, May 5, the mean transfer volume to exchanges was over 7 billion SHIB coins.

Today, that figure has dropped to 1.21 billion, indicating that the exchange inflow has fallen by nearly 6 billion. Since the drop came alongside a SHIB price increase, it suggests that buying pressure is dominant and could positively impact the market value.

SHIB Price Analysis: Up Only?

On the daily chart, SHIB’s price trades in an ascending channel. Amid this move, the Chaikin Money Flow (CMF) has reversed its trend and is back above the zero signal line.

This change indicates buying pressure, suggesting that SHIB will unlikely experience a correction in the short term. Instead, SHIB’s price might breeze past the resistance at $0.000015.

If that were to happen, the memecoin’s value might climb to $0.000019 at the 0.618 Fibonacci level.

However, if the CMF reading drops below zero again, SHIB’s price might fall below the lower trendline of the falling wedge, descending to $0.000010.