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Shiba Inu (SHIB) Nears Critical Support Level as 25% Price Drop Looms

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Victor Olanrewaju
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Key Takeaways

  • SHIB price action shows that it may fall below the 200-day EMA, which could validate a bearish trend.
  • On-chain data shows that the memecoin faces major resistance between $0.000021 and $0.000024.
  • In-depth assessment reveals that momentum is weak; as such, SHIB price correction may extend.

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.

Shiba Inu Price Analysis

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.

Shiba Inu price analysis bearish
SHIB/USD Daily Chart | Credit: TradingView 

Too Many Roadblocks

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.

SHIB price hits resistance
SHI In/Out of Money Around Price | Credit: IntoTheBlock 

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.

SHIB Price Prediction: Correction Ahead

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.

SHIB price could fall further
SHIB/USD Daily Chart | Credit: TradingView 

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.

Disclaimer: The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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Victor Olanrewaju

Victor is a reporter at CCN. Currently residing in Lagos, Nigeria, Victor focuses on writing news and providing readers with on-chain and technical analysis. Before he joined CCN, he worked as an analyst at BeInCrypto and AMBCrypto. He published several pieces at these outlets detailing investor behavior and analyzing price action across different cryptocurrencies. Victor holds a Bachelor's degree in Physics from the University of Ibadan. With his background, he finds it seamless to break down technical terms into simpler words while keeping readers engaged.
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