Despite a recent recovery, Shiba Inu's upward trajectory appears to be at a critical juncture, with several market and on-chain indicators suggesting that bullish momentum may be losing steam. Investors and traders are urged to exercise caution as key data points hint at a potential reversal rather than a sustained breakout.
Mounting Sell Pressure and Technical Hurdles
A significant warning sign for SHIB's price is the dramatic increase in tokens moving to exchanges. Approximately 284 billion SHIB tokens were transferred to exchanges in the past day, according to CryptoQuant data. Historically, a rise in exchange reserves often precedes sell-offs, indicating that holders might be preparing to liquidate their assets rather than accumulate for long-term holding. From a technical standpoint, SHIB is struggling against a long-standing descending trendline that has capped price rallies since mid-2023. The cryptocurrency faces substantial resistance in the $0.000012-$0.000013 range, where the 200-day and 50-day Exponential Moving Averages (EMAs) have converged. While the Relative Strength Index (RSI) is in a neutral zone, the recent surge in exchange reserves diminishes the likelihood of a continued breakout.
Weak Bullish Conviction and Potential Pitfalls
Further dampening the outlook is the volume profile, which shows relatively low follow-through purchases despite a brief upward price spike. This discrepancy between a brief rally and insufficient buying volume, coupled with increasing exchange reserves, suggests that short-term traders and whales might be strategically positioning themselves ahead of retail expectations. If selling pressure intensifies, a significant portion of the recent rally could be erased, pushing SHIB back toward the crucial $0.000011 support zone. Traders should be wary that what appears to be the beginning of a breakout could, in fact, be a "bull trap." A confirmed break above $0.0000136, ideally accompanied by diminishing exchange reserves, would be necessary to rekindle hopes for a sustained rally. Ultimately, the current bull run is undergoing a crucial test, demanding decisive buying action to prevent a potential reversal.
