SHIB may be approaching a downward correction, with indications pointing to…

In the rapidly evolving cryptocurrency landscape, Shiba Inu (SHIB) has recently drawn the interest of investors due to its impressive bullish trend. However, with its increasing social visibility, the possibility of a market correction also rises. This article examines the changing prospects of this digital currency as it approaches the weekend. Over the past 24 hours, SHIB has climbed to a new three-month peak, reaching $0.0000106 just prior to this writing. This milestone surpasses its previous high recorded on August 5th. While SHIB’s Relative Strength Index (RSI) had previously entered overbought territory on the same day, the current RSI is significantly lower, which may suggest a change in momentum.

RSI Divergence and Emerging Bearish Signals:

The developing correlation between SHIB’s price and its RSI indicates a significant price-RSI divergence, which could suggest that the strong bullish momentum is starting to diminish. This observation aligns with the RSI nearing overbought levels again, while the price has successfully moved above its 200-day moving average. On the social media front, a notable analyst known as @ali_charts has pointed out a TD sequential pattern forming on SHIB’s price chart. This pattern is generally seen as a sign of trend exhaustion and potential reversals. The combination of the TD sequential pattern and the price-RSI divergence highlights the possibility of SHIB entering a bearish pivot.

Analyzing On-Chain Data:

To validate these observations, an analysis of Shiba Inu’s on-chain metrics is crucial. A key factor to examine is whale activity, which can provide insights into potential market shifts. A bearish retracement often occurs due to increased selling pressure from large holders. SHIB’s supply distribution analysis reveals elevated selling pressure from addresses holding between 1 million and 100 million coins, indicated in red and orange. Notably, outflows from these addresses have been observed over the last four days. While this suggests that some whales are taking profits, it is important to recognize that these addresses represent less than 4% of SHIB’s total circulating supply.

Dominance of Major Holders and Rising Activity:

It is significant that addresses holding over 1 billion SHIB coins collectively account for an impressive 96.53% of the token’s total supply. Interestingly, these addresses have remained stable, showing no signs of outflows thus far. Conversely, SHIB’s transaction count has seen a steady increase over the past four days. Additionally, there has been a slight rise in trading volume during the same period. This increased activity could potentially reflect selling pressure, especially as several indicators point to a weakening bullish trend. This combination of elements suggests a scenario where SHIB may be on the verge of its next bearish retracement.

As Shiba Inu’s market dynamics evolve, its recent bullish surge encounters mounting obstacles. With a significant price-RSI divergence, the appearance of a TD sequential pattern, and heightened selling pressure from a segment of whale addresses, the likelihood of a bearish pivot becomes more pronounced. While SHIB’s major addresses remain stable, increased transaction counts and trading volume indicate a potential shift towards bearish sentiment. As the weekend progresses, investors and enthusiasts are encouraged to closely observe these indicators to assess the direction of SHIB’s market performance.

The post SHIB could be headed for a bearish retracement and evidence suggests… appeared first on BitcoinWorld.