Shiba Inu is experiencing high volatility as technical signals and reduced whale activity suggest potential changes in the market.
Shiba Inu (SHIB) had a volatile week, gaining over 19% in seven days, cementing its position as the second largest coin by market capitalization, just behind Dogecoin. However, mixed technical signals suggest both opportunities and risks for traders.
SHIB’s Relative Strength Index (RSI), a key indicator of momentum, has cooled significantly, falling from overbought levels. This change indicates a reduction in buying pressure and a possible consolidation phase. Although a decline in the RSI from high levels often indicates traders are taking profits, it also signals a more balanced market, potentially paving the way for sustained price movements.
The behavior of the largest SHIB holders, called whales, adds another layer of complexity. The number of whale addresses holding over 1 billion SHIB has decreased by 155 over the past month, suggesting that some large investors are dumping their tokens after the recent price surge. This selling pressure could create short-term headwinds, but the redistribution of assets among smaller investors could lead to greater decentralization, beneficial for long-term stability.
On the technical side, SHIB has fallen below its shortest exponential moving average (EMA), a sign that short-term bearish momentum may be developing. Despite this, the long-term EMA trends remain positive, keeping the potential for a bullish reversal intact. The price is at a critical juncture where correction and recovery scenarios are equally plausible. A bearish outcome could see SHIB test lower support levels, while further buying momentum could push the price higher, potentially surpassing recent highs.
For traders, the current volatility of SHIB offers both risks and opportunities. The market is waiting for a decisive move that will determine whether the coin continues its upward trajectory or enters a corrective phase.