Shiba Inu (SHIB) has been experiencing a steady downtrend, with the meme coin recently dipping to $0.00001000. Despite improvements in broader market conditions, Shiba Inu faces challenges due to a significant resistance zone created by a large supply of tokens.
As a result, SHIB’s growth potential may remain limited until this supply overhang is addressed.
Shiba Inu Faces A Wall
Shiba Inu is currently facing a massive supply zone of 33 trillion SHIB, worth just under $400 million. This supply was initially purchased at prices below $0.00001200, and investors are now under pressure due to the recent price drawdown.
The potential for selling from early investors is a key factor limiting SHIB’s price growth. As the price struggles to break past the $0.00001200 level, the supply zone remains a significant obstacle. Investors who have been holding these tokens at a loss may look to exit, which could stall SHIB’s recovery.
On the technical side, the Moving Average Convergence Divergence (MACD) indicator is approaching a bullish crossover, signaling a potential reversal for Shiba Inu. The MACD has been in a bearish crossover for nearly a month, contributing to the downtrend and keeping SHIB’s price under pressure. However, as the MACD nears a bullish crossover, it could indicate that the bearish momentum is waning.
A bullish crossover on the MACD would mark the end of the month-long downtrend and could provide the necessary momentum for SHIB to break through resistance levels. This technical signal suggests that investor sentiment may be turning more favorable, and Shiba Inu could experience a price rebound if the broader market continues to show strength.
SHIB Price Needs To Escape Downtrend
Currently, Shiba Inu’s price is trading at $0.00001169, with a slight 10% rise over the last 24 hours. The altcoin is attempting to secure $0.00001141 as support. If SHIB holds this level, it could mark a short-term stabilizing point, but a sustained rise above $0.00001200 remains a significant challenge due to the existing resistance.
The mixed market signals might prevent SHIB from breaking through the downtrend line, keeping the price below $0.00001252. If the resistance remains intact, a drop back to $0.00001059 or even lower is possible. This would likely keep SHIB in a consolidation phase, limiting its ability to make significant gains.
However, if Shiba Inu can manage to break through the downtrend line and flip $0.00001252 into support, it could trigger a more substantial rally. This price action would likely propel SHIB towards $0.00001354, invalidating the current bearish outlook. If the bullish momentum continues, it could signify the start of a more sustainable upward trend for Shiba Inu.
Disclaimer
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