Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Shiba Inu was likely to recede further down the price charts
- A bounce, although unlikely based on the evidence at hand, could provide short-sellers a better entry
Shiba Inu [SHIB] reached an impressive milestone of 3 million transactions on its L2 Shibarium. Yet, investor sentiment was bearish as the memecoin slipped below an HTF support zone. The lower timeframes were not very encouraging either.
Read Shiba Inu’s [SHIB] Price Prediction 2023-24
A previous price report from AMBCrypto dated 9 October stressed that the memecoin had overstayed at the crucial support zone at $0.0000072. It suggested that a move below $0.00000713 could see an extended pullback, which was in progress at press time.
The fair value gap could be vital, but will we see a bounce?
Source: SHIB/USDT on TradingView
The H4 market structure of Shiba Inu was strongly bearish. The Relative Strength Index (RSI) was at 27 and signaled hefty downward momentum. The On-Balance Volume (OBV) was in a downtrend in October, and the Chaikin Money Flow (CMF) has often dipped below -0.05. This indicated significant capital flow out of the SHIB market.
The red box from $0.000007 to $0.0000076 represented a bearish breaker block on the 1-day chart. The recent drop below $0.000007 meant the bears were firmly in the driving seat. The H4 fair value gap (white box) has confluence with the 61.8% Fibonacci retracement level.
It was unclear if we would get a bounce to the Fair Value Gap (FVG) at $0.000007. If we do, bears can look for shorting opportunities targeting the 23.6% southward extension level at $0.0000066.
The short-term market sentiment pointed to further losses- does the order flow indicate otherwise?
Source: Coinalyze
The Funding Rate slipped slightly into negative territory in recent hours. The prices continued to slip lower and the Open Interest (OI) was also steadily falling. This reflected bearish sentiment had a slight edge in the market.
Source: MobChart
Data from MobChart showed a $226k limit buy order just below prices, with an almost equally big sell order to the north. The order flow didn’t strongly support the idea of a bounce, but the removal of sell orders above SHIB could spur prices higher.
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Yet, with Bitcoin [BTC] below the $27k mark, it was also possible that the crypto market could see its recent losses accelerate. Therefore, SHIB buyers can’t bet on a bounce, but neither can short-sellers enter right away. Risk-averse traders can benefit from waiting and watching.
