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After experiencing a severe and protracted decline that drove the asset toward new local lows, Shiba Inu has now printed its first significant green candle. Even though the overall trend is still negative, traders looking for early indications of a recovery are taking notice of the abrupt spike in trading volume. Significant selling pressure on SHIB during the most recent decline caused the price to fall below important short-term supports, confirming that its downward trend was still ongoing.
New Shiba Inu candle
But there has been a discernible change in behavior in the most recent price action. Trading volume sharply increased as SHIB produced a green daily candle, indicating that buyers intervened forcefully following the sell-off.
This increase in volume is significant because it indicates a resurgence of market activity at low prices. Price stabilization and high volume frequently indicate that sellers are temporarily worn out and that accumulation may be starting. Since the move in SHIB occurs immediately after strong bearish momentum, the reaction is all the more noteworthy.
However, prudence is still required. A volume increase and a single green candle do not always indicate a reversal of the trend. These recoveries frequently turn into brief respite rallies before the larger downward trend picks back up. Price must regain important moving averages and maintain higher lows over several sessions for SHIB to confirm recovery.
Instead of seeing the current setup as proof of a bull market return, investors should see it as a possible trigger. If buying pressure persists, momentum might increase, but SHIB's next move will be greatly influenced by the state of the cryptocurrency market as a whole and liquidity flows. Bulls currently have their first chance in weeks thanks to the volume spike and early green reaction, but it is unclear if this will lead to a long-term recovery.
Bitcoin declines rapidly
With one of the most severe declines in recent months, Bitcoin has continued its correction with a precipitous decline that sent the asset deep into the $70,000 range. Bitcoin has now dropped below important moving averages and lost several technical supports, putting it in a position where selling pressure might finally start to lessen. The speed at which sentiment changed is demonstrated by recent price action.
When Bitcoin broke out of a rising support formation and was unable to sustain structure above the mid-$80,000 range, it caused panic-selling and a series of liquidations on derivatives markets. The outcome was a sharp increase in trading volume and a quick move toward the $78,000 region, which is typically indicative of forced exits and surrender by leveraged traders.
Notwithstanding the harm, this area might serve as a short-term stabilization zone. Large volume spikes during steep declines have historically, at least temporarily, indicated seller exhaustion. Additionally, momentum indicators are getting close to oversold levels, indicating that a relief bounce or consolidation phase may come next.
Investors should exercise caution, though. Bitcoin has formally entered a precarious technical position by moving into the deeper $70,000 zone. It is not impossible for the price to drop further toward the low-$70,000 range if it is unable to recover lost support close to the $80,000-$82,000 region.
Instead of expecting an instant recovery, traders should expect volatile price action going forward. Before a long-term reversal occurs, Bitcoin might try to establish a base through sideways movement. Market participants should now brace for more volatility, while keeping a close eye out for indications that selling pressure is actually abating.
Dogecoin wakes up
After weeks of consistent decline, Dogecoin has finally produced a noticeable bounce, leading some traders to wonder if the meme coin is about to enter a mini-bull phase. DOGE recently printed a sharp recovery candle along with increased trading activity, providing short-term respite to weary bulls after falling under several support zones and trending lower since its late-year highs.
Following a protracted downtrend that forced the asset into oversold territory, price action shows DOGE rising from the $0.10 region. As panic-selling slowed, short-term buyers intervened and momentum indicators began to stabilize. This action has given the asset the opportunity to recover small intraday levels, resulting in what could be called a short-lived mini-bull market on shorter time frames.
The rise in spot inflows is another positive factor. New money coming into wallets and exchanges indicates a resurgence of short-term interest in DOGE, which is frequently observed when traders try to capture oversold bounces. Particularly after liquidation cascades remove leveraged positions, these inflows support relief rallies and short squeezes.
The bigger picture is still pessimistic, though. Dogecoin is still trading below important moving averages, all of which are still declining, indicating that the prevailing trend is still negative. The current bounce has not yet broken this structure, and every recovery attempt in recent months has produced lower highs.
As of right now, the most likely scenario is that the overall downslope will continue after the relief rally loses steam. Short-term recoveries are more likely here, and sustained upside is still unlikely in the absence of a structural trend shift. Despite potential short-term bullish spikes, Dogecoin's longer-term trajectory still points to further declines unless there is more robust buying pressure.
Arman Shirinyan
Alex Dovbnya
Dan Burgin