Shiba Inu (SHIB) has broken crucial support levels, signaling increased selling pressure and a potential price decline. Despite previous attempts to break resistance, the bulls have failed, paving the way for a possible 23% drop.
Technical Indicators Point to Bearish Trend
On August 28, SHIB surged past the upper boundary of its trading range but quickly fell back. The meme coin’s inability to maintain this breakout highlighted the dominance of selling pressure. Now, SHIB has moved below the channel’s lower boundary, which previously served as support.
This breakdown suggests that the bears have overtaken the market, and further price declines may follow. The Directional Movement Index (DMI) on the one-day chart confirms this bearish sentiment. The positive directional index (+DI) has fallen below the negative directional index (-DI). This shift indicates that selling activity is currently outweighing buying interest.
RSI Signals Increasing Selling Pressure
The Relative Strength Index (RSI) also supports the bearish outlook. Currently sitting at 41.61, the RSI remains below the neutral 50 mark. This reading suggests that market participants prefer distributing the coin over accumulating it, further pressuring SHIB’s price.
Consolidation Phase Ends as Support Breaks
SHIB had been trading within a horizontal range since August 8, with resistance at $0.000014 and support at $0.000012. This consolidation phase reflected a balance between buying and selling pressures. However, the recent drop below the lower boundary indicates that bulls have lost control, and the market sentiment has shifted to negative.
Potential Outcomes: Reversal or Further Decline
If SHIB can retest its recent breakout and reverse the trend, it may start a new uptrend. Sufficient buying pressure could push the price toward the $0.000014 resistance level and possibly beyond, aiming for $0.000018.
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However, if the current downtrend continues, SHIB could face a further 23% decline. This drop would bring its value back to the August 5 low of $0.00001. In this scenario, selling pressure would likely continue to dominate, deepening the bearish outlook for SHIB.
