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Shiba Inu (SHIB) has plunged to a four-month low, triggering panic selling among holders as the fate of the memecoin hangs in the balance.
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This sharp decline, amounting to 19.91% within 24 hours, raises important questions regarding market sentiment and investor behavior amidst a broader crypto market downturn.
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According to COINOTAG, “Investors are turning bearish, leading to panic selling and a significant uptick in liquidation events.”
Shiba Inu’s recent decline, marked by panic selling and soaring liquidations, raises concerns about market confidence as SHIB hits a four-month low.
Why is Shiba Inu down today?
The drastic drop in Shiba Inu’s value can primarily be attributed to a shift in investor sentiment. COINOTAG’s analysis suggests that many investors, responding to bearish market indicators, have rushed to liquidate their positions to mitigate potential losses.
Source: Coinglass
Recent trends show a significant drop in Futures Open Interest (OI) for SHIB, which plummeted by 41.64% to $165.51 million. This decline reflects a pronounced lack of investor confidence in the current market environment.
Source: Coinglass
Moreover, liquidation events have surged with over $7.2 million in long positions wiped out. This suggests a considerable number of traders are being forced out of their positions, which exacerbates the downward pressure on SHIB’s price.
Source: TradingView
The declining Relative Strength Index (RSI), which has fallen from 39 to 24, indicates that the market has shifted into an oversold territory. This enhances the narrative that sellers currently hold the upper hand in trading dynamics.
Furthermore, the heightened trading volume experienced over the last day correlates with an influx of sell orders, signaling an overwhelming desire among traders to exit their positions.
The Chaikin Money Flow (CMF) also underscores this selling pressure, currently resting at -0.11, further indicating negative market sentiment.
Source: Coinalyze
As the funding rate for SHIB shifts into negative territory, with the Aggregated Funding Rate reported at -0.0207, it underscores a pervasive bearish sentiment across major exchanges, suggesting that the downward trend can persist.
What’s next for SHIB?
In summary, Shiba Inu is in the midst of significant panic selling, as liquidation events rise and bearish conditions dominate the market narrative. Given the prevailing trends, it is realistic to expect SHIB to possibly drop to the crucial support level of $0.000012. A failure to maintain this level could lead to further declines towards $0.00001088.
Conversely, if a market recovery emerges, SHIB could aim to regain barriers at $0.000016, potentially pushing towards $0.00001780 as traders reassess their strategies.
Conclusion
The recent turmoil surrounding Shiba Inu emphasizes the necessity for traders to remain vigilant and informed. Monitoring market signals and understanding underlying trends will be vital for navigating the volatile landscape ahead. SHIB holders should consider risk management strategies to safeguard their investments during these uncertain times.
