Shiba Inu (SHIB) has recently experienced a notable price correction, drawing it closer to a critical historical demand zone that previously catalyzed substantial rallies. Despite a recent market-wide downturn affecting the memecoin sector, underlying metrics suggest a potential rebound opportunity if SHIB re-enters this key price range, highlighting a nuanced picture of investor activity.
Approaching a Critical Demand Zone
SHIB's price has fallen by 26% in recent weeks, trading near $0.00000984 as of October 18th. This decline brings the memecoin closer to a significant demand zone between $0.00001078 and $0.00000817. This particular range holds historical importance, as it was the launchpad for an impressive 406% rally earlier in 2024, propelling SHIB to its yearly peak. The market is now keenly watching whether this zone will once again concentrate liquidity and trigger a similar upward movement.
Conflicting Investor Signals
While the approaching demand zone presents an optimistic outlook, current investor behavior shows mixed signals. Data suggests that retail investors, particularly in both the Spot and Perpetual markets, have contributed to the recent price decline through negative netflows and the closure of over $6.8 million in perpetual contracts, indicating a risk-off sentiment. This capital rotation may have diverted funds to other, stronger sectors, leaving SHIB vulnerable to short-term selling pressure. Despite these outflows, the active presence of buyers suggests the downward move could be strategic and temporary. The Money Flow Index (MFI) shows a slight uptick, signaling continued capital inflow into SHIB. Similarly, the Accumulation/Distribution (A/D) metric remains strong at 62.14 trillion SHIB, indicating steady buying volume. This sustained accumulation amidst price weakness suggests that while some investors are exiting, others are actively positioning themselves, potentially anticipating further gains, especially if SHIB hits the demand zone where buy orders are heavily concentrated.
