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It's possible that Shiba Inu's brief recovery effort is already losing steam. SHIB eventually recorded a positive daily reading of roughly 17.9 billion tokens following four days in a row of negative exchange netflows. This would typically be seen as a bullish development, since it implies that more tokens are leaving exchanges than are joining them, which lessens the pressure to sell right away. But the market's response has been remarkably lackluster, which begs the question of whether buyers are genuinely ready to take charge.
Shiba Inu stays suppresed
The price chart presents an alarming image. SHIB is still trading below all significant moving averages and is in a strong downtrend. The market structure was drastically altered by the recent break from the ascending channel that had sustained price action from March to May. Since then, there has been increased selling pressure on every attempt at recovery.
An excellent example is the most recent action. SHIB was able to stabilize and post a slight bounce after the steep drop toward the $0.0000045 area. However, the asset has not produced any significant upside momentum in spite of the positive exchange flow reading. Instead, the 50-day and 100-day moving averages continue to serve as overhead resistance, while the price is stuck close to local lows.
It is significant that exchange flows and price action are not in sync. Although on-chain data frequently offers early indicators of shifting market sentiment, it is insufficient by itself. Following multiple sessions of significant exchange outflows, including one day when more than 300 billion SHIB left trading platforms, the most recent netflow reading was positive. Market players have not yet converted this accumulation-like behavior into aggressive purchasing.
Improvement is coming
In theory, bears continue to have the upper hand. Despite a slight recovery from oversold conditions, the RSI is still weak overall. Following the initial sell-off, volume has also decreased, suggesting that despite the lower prices, buyers are not jumping into positions.
Bulls must retake the previous support area around $0.0000052-$0.0000055 in order for SHIB to create a more compelling recovery story. That region now coincides with important moving averages and serves as resistance. Until then, the current bounce appears to be more of a stabilization than a reversal.
The good news for holders is that exchange outflows are still indicative of accumulation. Unfortunately, it hasn't been confirmed by the chart yet. For the time being, SHIB seems to be caught between a technical structure that is still very pessimistic and improving on-chain signals.
U.Today Editorial Team
Dan Burgin
