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With over 15% of its value lost in a matter of hours, Shiba Inu has experienced a dramatic and abrupt reversal that has left many traders and investors in shock. Concerns regarding market liquidity and the sustainability of SHIB's recent rally were raised when what appeared to be a bullish breakout swiftly became a harsh reality check.
There were indications of a robust recovery for SHIB earlier this week. Momentum was driving the price in the direction of the 100-day EMA after it broke above significant resistance at $0. When technical indicators lined up and on-chain data showed a spike in whale activity, bulls were feeling hopeful. But that momentum did not last long. SHIB has dropped sharply from its recent peak of $0.00001560 to trade around $0.00001326 as of right now.
The price has now fallen below crucial levels, including the breakout point, after this move erased several days worth of gains in a single red candle. It seems that a false breakout in which buying momentum was unable to hold above resistance levels was the cause of the steep correction.
Alex DovbnyaDue to a lack of buy-side support to withstand the selling pressure, this was probably made worse by a liquidity shortage. Volume increased during the decline, suggesting that short-term traders who were caught in the move were rushing to sell their positions. On an unstable market, this type of volatility can be particularly harmful. Such a swift breakdown might frighten away remaining SHIB bulls - particularly those seeking confirmation of a longer-term reversal as confidence is already on edge.
If SHIB is unable to find immediate support near $0.00001300, the Relative Strength Index (RSI) has fallen back to 47, indicating waning momentum and possibly paving the way for additional downside. Should this level break, the $0.00001200-$0.00001250 range might be the next stop. After a hopeful breakout, 15% of SHIB's value vanished in a matter of hours, resulting in a harsh rejection. SHIB is still in a precarious position until confidence improves and actual liquidity increases.
Vladislav Sopov
Dan Burgin