Shiba Inu Downward Trend Nears Critical Support, Bottom Could Be Just 10% Away

The news of Shiba Inu downward trend has engulfed the market, leaving many investors and enthusiasts wary of the meme coin’s future. Over the past month, SHIB has tumbled by 19.33%, a slide that has significantly shaken the confidence of many holders. However, while the immediate outlook appears bleak, historical patterns and on-chain data suggest that a turning point may be closer than it seems.

Shiba Inu Downward Trend: On-Chain Data Suggests Potential Reversal

Shiba Inu (SHIB) is currently hovering near a critical support level, one that has historically signaled a reversal in the coin’s price. According to on-chain analysis, the Shiba Inu downward trend may be approaching its bottom, with just a 10% drop potentially left before a significant price reversal.

This analysis is underpinned by the Market Value to Realized Value (MVRV) Long/Short Difference metric, a tool that has proven effective in identifying market bottoms and tops. As of now, the MVRV Long/Short Difference for SHIB stands at -14.44%. Historically, SHIB’s price tends to bottom out when this metric reaches -24.05%.

“For those tracking SHIB’s movements, the MVRV metric is a critical indicator,” said a senior analyst at IntoTheBlock, a leading blockchain analytics firm. “When we saw this metric hit -24.05% in October 2023, it preceded a significant upward movement in SHIB’s price, culminating in a peak in March of this year.”

If history is any guide, SHIB could be just 10% away from hitting a new bottom, which might trigger a reversal to the upside. This potential for a turnaround is a beacon of hope for SHIB holders who have endured the Shiba Inu downward trend over recent weeks.

Short-Term Holders Signal Growing Confidence – Shiba Inu Downward Trend

Despite the ongoing Shiba Inu downward trend, there is a notable increase in short-term holders, which could indicate a brewing bullish sentiment. Data from IntoTheBlock shows that the number of SHIB holders who have accumulated the token within the last 30 days has surged by 11%.

This increase in short-term holders could be a sign of growing confidence in the near-term potential of Shiba Inu. These investors, often referred to as ‘smart money,’ are likely betting on a reversal in the Shiba Inu downward trend. However, this sentiment is fragile; a further decline in SHIB’s price could quickly erode this newfound optimism.

“If the number of short-term holders continues to rise, it could be a strong indicator of a bullish turnaround,” noted the IntoTheBlock analyst. “However, if the trend reverses and these holders begin to exit, it could spell trouble for SHIB’s price trajectory.”

The technical outlook for Shiba Inu also paints a picture of cautious optimism. SHIB’s price has been trapped in a descending channel since mid-July, a bearish pattern characterized by two downward-sloping trendlines. The upper trendline acts as resistance, while the lower trendline provides support.

As of the latest data, SHIB remains below the upper trendline, indicating that the Shiba Inu downward trend is still intact. If SHIB fails to break above this resistance level, the price could continue to slide, potentially reaching the critical support level at $0.000012.

“This descending channel is a classic bearish setup,” explained a technical analyst from TradingView. “If SHIB breaks below the lower trendline, we could see further declines. However, if it holds at the $0.000012 support, there’s a strong chance for a bounce back toward $0.000015.”

The $0.000012 level is particularly significant because it represents the lower bound of the descending channel. A break below this level could lead to a more pronounced decline, while a successful defense could set the stage for a reversal in the Shiba Inu downward trend.

If this trend continues, it signals growing confidence in the short-term potential of Shiba Inu. However, a decline would suggest doubt about the token’s bullish outlook.

Shiba Inu Downward Trend: What Lies Ahead for Shiba Inu?

The future of Shiba Inu remains uncertain, but the signs of a potential reversal are becoming increasingly difficult to ignore. The convergence of on-chain data, rising short-term holder confidence, and key technical indicators all point to the possibility that the Shiba Inu downward trend could be nearing its end.

However, caution is still warranted. The crypto market is notoriously volatile, and any number of factors could derail a potential recovery. Investors should keep a close eye on SHIB’s price movements in the coming days, particularly around the $0.000012 support level. A bounce from this level could be the first sign that the Shiba Inu downward trend is finally reversing.

On the other hand, if SHIB breaks below this critical support, it could lead to a deeper decline, potentially pushing the price lower than even the most pessimistic forecasts. In this scenario, SHIB holders may need to brace for a prolonged bear market.

Shiba Inu downward trend has been a challenging period for investors, but there may be light at the end of the tunnel. With on-chain data suggesting that the bottom could be just 10% away, and with a growing number of short-term holders betting on a reversal, there is a glimmer of hope on the horizon. However, the road ahead is fraught with uncertainty, and only time will tell if SHIB can overcome the challenges that lie ahead.

For now, all eyes are on the critical support level at $0.000012. Whether SHIB holds this line or breaks through it will likely determine the direction of the Shiba Inu downward trend in the weeks to come. The Bit Gazette the latest crypto news and expert analysis.