Shiba Inu (SHIB) has confirmed a bearish "death cross" on its chart as the daily moving average (MA) 50 has crossed below the MA 200.
The last time Shiba Inu formed a death cross on its chart was in February 2022. Following this, Shiba Inu saw several months of price underperformance in keeping with prevailing adverse market conditions, ending the year at lows of $0.00000788. It bears mentioning that Shiba Inu traded in the $0.000026 to $0.000028 range in late February 2022, when the death cross formed.
Fast forward to 2023. Shiba Inu initiated a rise in 2023, reaching highs of $0.0000159 on Feb. 4. Shortly after the rally stalled, Shiba Inu formed its first golden cross of 2023. The golden cross, the opposite of the death cross, is formed when the MA 50 crosses above the MA 200 and is regarded as a positive indicator.
Events were overtaken by the most recent market correction, and several crypto assets became oversold in short-to-intermediate time frames.
The bearish intersection of the two averages may theoretically indicate that the market is ready to dive further. However, the death cross may also herald the beginning of a bottoming period for a crypto asset, so this is not always the case.
Backward-looking data?
More often than not, the "death cross" indicator has a bad reputation for trapping sellers on the wrong side.
This is because, as some pointed out, the death cross, irrespective of whether it occurs on the daily or weekly charts, may be unreliable as it is a lagging indicator. The argument remains that the indicator is based on backward-looking moving averages and, thus, depicts the asset's past performance. This might seem to be the case for Shiba Inu.
SHIB's daily RSI remains in the 30 oversold levels, which might suggest that it remains significantly oversold and might be bottoming out.
At the time of writing, SHIB was marginally down in the last 24 hours to $0.0000087.