Will Shiba Inu Break the Downtrend?

The Shiba Inu (SHIB) token continues to struggle with its weekly and monthly lows, facing significant resistance near critical support levels. Despite the challenging price movement, analysts suggest that a breakout of the trend line could signal a potential bullish reversal. Market sentiment remains cautious, with technical indicators painting a mixed picture for SHIB’s future. The focus lies on the potential breakout above the descending trend line that has dictated SHIB’s price movement.

According to an analyst, if the price manages to breach this trend line, it could present a favorable opportunity for a long-term buying position. However, if SHIB fails to overcome this resistance, the downward trend is likely to persist, suggesting further downward pressure on the price.

As depicted in the analysts’ chart, the SHIB market has been in a clear downtrend, with a descending trend line guiding price movements since June. This trend line has acted as a formidable resistance, consistently pushing the price downward and preventing any sustained upward momentum. The price movement reveals a pattern of lower highs and lower lows, closely aligned with this trend line. However, the price is now attempting to test this resistance, a move that could set the stage for the next market direction.

Support levels play a crucial role in this scenario, with the first major level at $0.00001073, where SHIB previously found buyer interest. Below this level, significant support lies at $0.00000879, with a minor level at $0.00000848, representing the last lines of defense against further declines. On the flip side, immediate resistance is at $0.00001375. A breakout above the trend line could indicate a potential rally, with higher resistance targets at $0.00002315 and $0.00002572.

More Holders Out of the Money

Recent data from IntoTheBlock sheds light on the current sentiment among SHIB holders. Fewer addresses fall within the $0.000008 to $0.000013 range, currently profitable. Conversely, a larger number of “out of the money” holders, especially those who purchased at higher prices, indicate potential selling pressure if prices remain low. The concentration of addresses out of the money at higher prices suggests potential resistance levels.

Read more Shiba Inu Prices May Soon Rise: Key Indicators Suggest Reversal

As the price approaches these levels, shareholders may attempt to sell. Furthermore, if the price falls below $0.000013, the small group at break-even may begin realizing losses, leading to sell-offs that could push the price down.

Potential for a Bullish Reversal

In related developments, MMBTtrader, an analyst on TradingView, suggested that Shiba Inu might be gearing up for a significant upward move. The MACD indicator, showing bullish divergence, further bolsters the likelihood of a price increase. The market remains at a critical juncture, with upcoming price movements likely to determine SHIB’s future trajectory.

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