Shiba Inu (SHIB) token has recently undergone a strong correction in the market, dropping all the way down to 27.54% after rallying out of a long consolidation phase. SHIB had been trading within a narrow corridor between $0.00001548 and $0.00002169 for weeks, building momentum before breaking above this range on its way up to a locally high price of $0.00003344.
This rise was at the 1.0 Fibonacci extension level and shows that the token has been buoyed by strong bullish momentum attached to increased optimism and trading volume across the market.
Current Shiba Inu Support and Resistance Levels
Initially, the breakout generated considerable trader interest through SHIB price movement beyond previous resistance levels. It signaled much bullishness towards such conditions. This upward movement hit a roadblock at the peak, where some resistance emerged.
The retracement back into an upward, broken, and sloping channel was caused by a sudden and sharp decline in trade and market sentiment shifts as traders took profits.
Currently, on the 10th of December 2024, SHIB is trading at around $0.00002513 near the 0.236 Fibonacci retracement level. This serves as a critical support zone within the disjoint channel of the coin. The ability of this support to hold will determine what the next move may be for this token and whether bulls can regain market control.
The ascending disjoint channel confirms that SHIB is undergoing a correction phase, although this should not cloud the overall bullish trend at a price near the lower boundary of the channel. If this support level holds at $0.00002513, it may pave the way for a potential recovery. Traders would see such strength to see a move toward the first major resistance level at 0.786 Fibonacci level valued at $0.00003106, which gives a bounce back looking for a recovery.
A breakthrough in this resistance can likely be followed by retesting the previous high of $0.00003336 and extending further toward the 1.272 Fibonacci extension at $0.00003629. These marks would represent major gains for SHIB, thereby boosting increased bullishness in the market.
On-Chain Sentiment for Shiba Inu
Yet, if SHIB loses its strength at $0.00002513 support, it would show a huge loss to the cryptocurrency market. The next level is $0.00002259, which will invalidate the current bullish sentiment if broken.
A breakdown below that price could signal a strong bearish reversal, dragging SHIB back into its previous consolidation range and creating concerns in other investors regarding another downtrend.
Although technical analysis is indicative of possibilities on various potential future support levels and resistances, on-chain readings have a much more hesitant view of Shiba Inu. The Open Interest (OI)-weighted funding rate chart, therefore, tells a divergent story to that of the bulls.
After focusing the funding rates so positively for the mid-November period affirmation indicator for strong bullish dominance funding rates have become negative, currently lying at -0.0179%.
The negative funding rate indicates an increasing preference for short positions among traders, indicating that market participants are expecting SHIB to go further downside in the near term. It is this shift in sentiment that turns critical because it reflects the widening skepticism that SHIB can consolidate gains made recently.
Outlook for Shiba Inu Price Movement
Amid this highly dynamic market, traders and investors are extremely keen on crucial support levels and market sentiment indicators to determine the next possible turnaround point for Shiba Inu. The next few days seem crucial in determining whether bulls can take back control or bears will continue to monopolize market activity on SHIB.
Overall, technical analysis is shown to be in favor of recovery if necessary support levels are maintained. Still, on-chain data shows increasing hesitance from traders, which further leads to the correction in SHIB’s price. Investors should remain vigilant as they look at indicators of market psychology as well as technical ones to make good decisions about their future positions in Shiba Inu.
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