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After weeks of persistent downward pressure, Shiba Inu may be nearing a pivotal moment as recent price action starts to show early indications of a possible bullish reversal. Even though the entire cryptocurrency market is still brittle after Bitcoin's dramatic decline, SHIB has avoided the worst sell-off stages that impacted numerous important assets, creating space for a technical rebound scenario to emerge.
Shiba Inu can reverse
Following a protracted decline, SHIB has produced a traditional bullish reversal candlestick structure on the daily chart. With a long downside work and buyers stepping in forcefully close to local lows, the most recent candle demonstrates a strong rejection of lower prices. This pattern usually signals a short-term reversal or relief rally as sellers are losing control, as supply starts to be absorbed by demand.
Additionally, the price action comes after a breakdown from a tightening wedge formation, where buying interest at lower levels swiftly overtook selling pressure that had initially increased. False breakdowns like these frequently serve as catalysts for rebounds when short positions are closed and buyers enter the market at a discount, trapping late sellers.
It is not that bad
Crucially, interest should also be paid to SHIB's performance in comparison to Bitcoin. During the recent market turbulence, Bitcoin broke below historically significant support zones, but SHIB did not collapse as catastrophically. In contrast, the token's structure remained consistent across its wider range, indicating that downside exhaustion might be nearer than many traders suspected.
Investors now prioritize recovering nearby resistance levels, such as short-term moving averages that currently limit attempts at price recovery. If market conditions stabilize, a successful move above these technical barriers may pave the way for a possible recovery of 20-30%.
As of right now, SHIB is displaying one of its most obvious reversal signals in recent days. Only time will tell if this early attempt at recovery develops into a more robust comeback or fades due to fresh selling pressure.
Arman Shirinyan
Yuri Molchan
Alex Dovbnya