- Shiba Inu shows multiple signs indicating bullish weakness.
- On-chain data showed a gradual buildup of sell pressure from whales.
Shiba Inu [SHIB] has recently been on every investor’s radar courtesy of its impressive bullish performance. Its social dominance has been on the rise but so is the probability of a retracement.
Read Shiba Inu’s [SHIB] price prediction 2023-24
Bearish signals for SHIB were seen piling up, so let’s dive in and explore this cryptocurrency’s fate as the weekend rolls in. SHIB soared to a new three-month high in the last 24 hours.
It peaked at $0.0000106 hours before press time, outperforming its previous high that it achieved on 5 August. The latter was the same day that SHIB’s Relative Strength Index (RSI) peaked and even dipped into the overbought territory.
Source: TradingView
SHIB’s RSI, at the time of writing, was notably lower than it was on 5 August. This meant that the memecoin was forming a price-RSI divergence. It could be an indication that bullish momentum was running out of steam. Note that the RSI is once again approaching overbought territory and the price has also managed to cross above the 200-day moving average.
A popular analyst under the Twitter handle @ali_charts recently observed that a TD sequential pattern is forming on SHIB’s price chart. The same pattern is used to confirm trend exhaustion, as well as potential reversals.
#ShibaInu | Caution advised! ⚠️ The TD Sequential presented a sell signal on $SHIB 4hr chart, anticipating a one to four candlestick correction. pic.twitter.com/gsETmZTHpE
— Ali (@ali_charts) August 11, 2023
Shiba Inu bears might be preparing to take over
Both the TD sequential pattern and price-RSI divergence suggest that SHIB could be on the verge of a bearish pivot. But can on-chain data confirm the same observations? That warrants an investigation of Shiba Inu metrics. Let’s start with the whale activity.
A bearish retracement will likely be characterized by a surge in sell pressure from whales. SHIB’s supply distribution metric reveals sell pressure from addresses holding between addresses holding 1 million and 100 million coins (denoted in red and orange).
Source: Santiment
The outflows from the aforementioned addresses have been taking place in the last four days. While this confirmed that some whales have started taking profit, it was surely worth noting that those addresses represent less than 4% of SHIB’s total circulating supply.
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Addresses holding over 1 billion coins hold most of Shiba Inu’s supply at 96.53%. However, these addresses have been holding steady, hence no outflows yet.
Nevertheless, SHIB’s transaction count registered a steady uptick in the last four days. We also observed a slight surge in volume within the same period.
Source: Santiment
A surge in activity could be a manifestation of selling pressure especially now that there are multiple signs indicating bullish weakness. In other words, these findings might be signing off SHIB’s next bearish retracement.
