Will SHIB drop another 10% as bulls fail to defend this crucial price point?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Shiba Inu was likely to suffer losses in the coming weeks as the bearish trend remained strong.
• The most recent bounce has faced rejection from the $0.0000086 area- which signaled demand was weak. 

Shiba Inu [SHIB] incurred enormous losses in price over the past week. On 13 August, the bias was strongly bullish for the memecoin. Furthermore, it looked to be headed toward the high from April. It was in a strong uptrend on the daily chart.

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Read Shiba Inu’s [SHIB] Price Prediction 2023-24

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This trend began in early July, from a zone of demand that had previously been tested in June 2022. At the time of writing, Shiba Inu was headed toward this zone once more — can the buyers halt the bearish advance?

Shiba Inu’s momentum shifts bearish as sellers force a retracement of most of the past month’s gains

After 13 August, SHIB faced losses that amounted to 33.1% within four days as the prices crashed from $0.0000108 to $0.00000725 on 17 August. There was a bounce on 18 August as SHIB climbed to retest the $0.0000086 area, where it faced rejection thereafter.

The market structure on the 1-day chart showed strong bearishness, and the Relative Strength Index (RSI) also fell below neutral 50 to reinforce this idea. The On-Balance Volume (OBV) stuck to a support level from earlier in August but the Chaikin Money Flow (CMF) showed significant capital flow out of the market.

This selling pressure was likely to drive SHIB back to the $0.000007 zone, where a bullish order block (red box) from 28 June was present. This zone might not offer a strong positive reaction upon the next retest, as the first test and subsequent bounce appeared to have reversed from the $0.0000086 resistance in the past two days.

Shiba Inu hinted at a decrease in activity on-chain

The price action of Shiba Inu highlighted the strength of the bears. Yet the dormant circulation metric did not see a sharp uptick despite the heavy selling pressure. This suggested many addresses chose to hold on to the meme coin on-chain rather than dump it in panic.

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The metrics did not outline a positive outlook though. The Market Value to Realized Value (MVRV) ratio took a hit, and the network growth also fell to the late July lows. The daily active addresses also trended slowly downward over the past three weeks. Together they showed decreased user adoption and activity and did not reflect bullishly on SHIB.