For over two months, Shiba Inu [SHIB] has struggled to oscillate beyond the chains of its trendline resistance (white, dashed). The bearish bias of the dog-themed coin has made it vulnerable to sell-offs from its near-term EMAs. (From now on, SHIB prices are multiplied by 1000 for brevity.)
The $0.00957 support recently rekindled a buying rally, but the buyers were unable to change the near-term bearish narrative. A sustained decline below $0.01014 could aid sellers in finding new lows.
At press time, SHIB traded at $0.01013, down by 2.82% in the last 24 hours.
SHIB broke down from its up-channel, can the bears sustain a rally?
Source: TradingView, SHIB/USD
SHIB’s lift-off from the $0.00957-level over the last week set the foundation for a short-lived bull run toward the 20 EMA (red) and the 50 EMA (cyan).
While the bears undermined the bullish pennant setup’s breakout, the buyers strived to breach the bonds of the 50 EMA in an ascending channel rally. An expected reversal inflicted a patterned breakdown that put SHIb back on a bearish track.
While the 20/50 EMAs looked south, sellers could continue exerting their near-term dominance. A rebound from the $0.01014-level could induce further losses before a reversal. In this case, the $0.00981-mark would be the first major support level for the sellers to test.
An immediate or eventual close above the $0.01014-mark can expose the token toward a short-term upside. In such circumstances, SHIB could witness a bearish invalidation and test the $0.0103-mark.
Furthermore, the Chaikin Money Flow’s (CMF) decline below the zero mark resonated with the heightened bearish edge. But its higher troughs over the last few days bullishly diverged with the price action. This reading entailed a rebound possibility in the coming sessions.
Improved funding rates
Source: Santiment
Since mid-June, SHIB’s price exhibited sensitivity to an improvement in funding rates. However, since the past month, the funding rates marked a gradual growth but the price action struggled to induce a streak of higher peaks and troughs. Should the price action follow, the buyers would look to alter the near-term narrative in their favor.
Also, the alt shares a 38% 30-day correlation with Bitcoin. Thus, keeping an eye on Bitcoin’s movement with the overall market sentiment could be essential to identify any bearish invalidations.
