Shiba Inu (SHIB) is grappling with strong bearish momentum as it remains trapped within a falling channel pattern, raising the possibility of an extended correction. Despite a recent attempt to recover, bearish pressure from profit-taking investors and rising short positions in the derivatives market is casting doubt on a sustained upside move.

SHIB Remains in a Downtrend

Since early May, SHIB has failed to break above the $0.000017 resistance, sparking a downward trajectory that has formed a clear falling channel. After slipping below the 50-day Exponential Moving Average (EMA), SHIB dropped to a monthly low near $0.000012.

At present, the token trades around $0.00001332, registering an intraday surge of 4.83%. This mild increase comes just days after a 5% surge on Monday, which had sparked hopes of a bullish breakout. However, the recent 30-day 16.88% dip signals that sellers remain in control.

Technically, the MACD and signal lines are inching toward a bullish crossover, offering a glimmer of upward momentum. Still, without a confirmed breakout, the falling channel’s downward pressure remains the dominant trend.

Related article: Shiba Inu Whale Activity Spikes: Is a Breakout on the Horizon?

Key Resistance and Support Levels

If SHIB manages to break out of the falling channel, the next immediate resistance lies at the 100-day EMA, which currently sits at $0.00001418. A stronger breakout could aim for the 23.6% Fibonacci retracement level at $0.00001590—a key upside target for short-term bulls.

On the downside, critical support remains at the lower boundary of the falling channel and the psychological level of $0.000010. If SHIB fails to hold above this support, a deeper correction could follow.

Long-Term Holders Begin Profit-Taking

On-chain data suggests that long-term holders are exiting their positions, contributing to the current downward pressure on the market. According to IntoTheBlock’s Holding Time of Transacted Coins metric, investors sold around 4.44 trillion SHIB tokens on June 4. These tokens had an average holding period of one year, implying these sales were likely made at a profit.

This wave of selling, which preceded the 6.3% crash on June 5, reflects waning confidence among long-term investors and highlights growing caution within the community.

Derivatives Market Turns Bearish

Meanwhile, data from Coinglass reveals rising bearish sentiment among derivatives traders. The long-to-short ratio has dropped to 0.8636, with short positions accounting for 53.66% of recent activity.

This shift suggests that traders are increasingly betting against SHIB, anticipating a steeper decline in the near term. The growing imbalance between long and short positions underscores the expectation of further correction, especially if support levels fail to hold.

While Shiba Inu shows some technical signals that could support a short-term bounce, the broader sentiment remains cautious. The persistent falling channel pattern, combined with profit-taking from long-term holders and rising bearish bets in the derivatives market, suggests that SHIB’s path to recovery may face significant obstacles.