Shiba Inu bounces, but retains its bearish structure

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Shiba Inu showed a bounce was likely, but whether a range formation would follow such a bounce was unclear.
• The demand and sentiment were not yet strong enough to warrant expectations of a move toward $0.00001- but this could change.

Shiba Inu [SHIB] fell 32% from 14 August to 17 August to reach a higher timeframe support zone. While the meme coin did find some demand in that area, the lower timeframe price charts showed that the bears were dominant.

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To change this, a large influx of demand was required. The past few days saw a minor bounce from the aforementioned demand zone, which could be driven by news of the heightened burn rate.

Can SHIB buyers succeed in shifting the market structure?

Source: SHIB/USDT on TradingView

Highlighted in orange at $0.00000871 was the recent lower high that SHIB posted. On the 2-hour chart, this was the level to beat for the market structure to flip bullishly. Yet, the $0.00000846 (white) higher timeframe resistance would likely impede the buyers’ efforts.

The 12 hours before press time saw Shiba Inu bounce by 9.27%. The OBV has climbed slightly, and the RSI breached the neutral 50 mark to denote bullish momentum. Hence, the evidence supported a move further higher to the $0.00000871 level.

A rejection from that level would indicate a range formation was the likely scenario to unfold, with $0.00000776 as the range low. On the other hand, a move past the $0.000009 resistance would signal that SHIB was likely ready to move all the way north to the next resistance at $0.0000107, which had significance on the higher timeframes.

The metrics did not show positive sentiment

Source: Santiment

Santiment data showed that the MVRV ratio (30-day) was negative, which suggested the meme coin was undervalued. Yet, its weighted sentiment was barely positive after the recent, steep losses. The mean coin age has been on the rise over the past five days, which should encourage buyers.

Source: Coinglass

How much are 1, 10, or 100 SHIB worth today?

The Open Interest chart has been in a strong downtrend since mid-August. However, if this begins to change over the next few days, it could indicate bullish sentiment creeping into the market.

An increase in the price of Shiba Inu alongside the OI would signal speculators were bidding. This development could be key for SHIB to break past the local resistance and move toward $0.00001.