Key Takeaways
Despite climbing to $0.000033 in December 2024, Shiba Inu (SHIB) price has fallen to $0.000021. For some analysts, this decline might provide a rare opportunity to accumulate SHIB at cheap prices.
However, an in-depth analysis shows that this might not be the situation on ground.
With selling pressure rising and SHIB at risk of dropping below a key support level, the meme coin’s next move could end up in another decline. Let’s evaluate why this could be the case.
According to the daily chart, SHIB’s price is on the brink of dropping below the 200-period Exponential Moving Average (EMA). The 200 EMA acts as a crucial support level as it determines if the long-term performance of a cryptocurrency might end up in an uptrend or downtrend.
When the price rises above this indicator, the crypto in question might experience a prolonged uptrend. But when the price falls below it, indicates that correction could be close.
For instance, SHIB’s price fell below the 200 EMA on July 17, 2024. By Sep. 7 of the same year, the price has fallen from $0.000019 to $0.000012. Therefore, if the memecoin’s value slides below this key support this time, it could lead to a double-digit correction.
Looking at it from an on-chain angle, the In/Out of Money Around Price (IOMAP) supports the bearish outlook. With the IOMAP, one cann identify price levels that could act as support or resistance depending on the volume accumulated at the region.
Typically, the higher the cluster of volume at a price range, the stronger the support or resistance. Most times, these levels act as psychological barriers and if the price approaches one of these clusters, it may either struggle to break through (resistance) or find strong buying interest (support).
According to IntoTheBlock data, the volume of SHIB tokens held in unrealized losses, accumulated between $0.000021 and $0.000024, outweighs the volume held in the money between $0.000018 and $0.000020.
The concentration at these higher levels suggests that SHIB could experience increased selling pressure as holders may attempt to cut their losses.
If this is the case, SHIB could face a prolonged period of downward pressure.
Meanwhile, on the same daily chart, the Awesome Oscillator (AO) is stuck in the negative zone. The AO compares recent price movements to historic ones, which helps measure momentum.
When the AO is positive, momentum is bullish. However, since it is negative, the momentum around SHIB is bearish.
Considering this current condition, SHIB’s price might experience a 25% decline. If validated, this would leave the token at the 0.236 Fibonacci level, meaning the price could trade at $0.000016.
Contrarily, this trend might change if momentum becomes bullish and buying volume exceeds the token at a loss between $0.000021 and $0.000025.
If that is the case, SHIB could rebound to $0.000033.