Shiba Inu Price to Escape End 5 Month Correction with this Breakout

On Monday during U.S trading hours, the cryptocurrency market witnessed a quick spike in supply pressure, reflected in Bitcoin’s sudden reversal from $70000. The selling momentum spread quickly to the meme cryptocurrency sectors due to their volatility prolonging the consolidation trend since last week. The Shiba Inu is down 0.3% today and a high wick rejection at major resistance hints potential downswing.

Shiba Inu Price Faces Bearish Sentiment Despite Increased Futures Interest

For the past two weeks, the Dog-themed memecoin Shiba Inu Inu has been underperforming in the broader market recovery. From the July 16th peak of $0.00002, the SHIB price plunged 16.8% to trade at $0.0000167, while the market cap plunged to $9.89 Billion.

The Shiba Inu price below the daily EMAs (20, 50, 100, and 200) indicates the path to least resistance is down. Moreover, the momentum indicator RSI at 43.7% projects a bearish to neutral market sentiment.

This downtrend can be attributed to overhead supply pressure from the resistance trendline of the falling wedge pattern. Since March 2024, the SHIB price has witnessed a steady downtrend resonating between the two converging trend lines of the pattern.

Interestingly, this setup signals the maturity of a downtrend and the potential for major traversal.

In July, the Shiba Inu futures open interest experienced a substantial rise, as indicated by data from Coinglass. The open interest (OI) value surged from $27.79 million to $38.86 million, marking an increase of approximately 39.83%. 

This significant growth in open interest suggests heightened trading interest, which could be a precursor to increased price volatility or sustained price movements.

Moreover, Shiba Inu’s layer-2 blockchain Shibarium has hit a significant milestone, processing over 6 million blocks in less than a year since its launch. This achievement underscores the platform’s robust activity and growing adoption, indicating strong user engagement.

Thus, a potential breakout from the wedge resistance will signal a major change in market dynamics and provide buyers with suitable support to drive a stable rally. The post-breakout rally may extend the Shiba Inu price forecast target to $0.00003.

Key Takeaway

Under the influence of a falling wedge pattern, the Shiba Inu price has witnessed constant resistance since mid-July. Despite a major resistance so close, the coin price refused a sharp correction and continued to challenge the overhead trendline. With the broader market bullish and the increasing Open interest, the SHIB price is poised for a wedge breakout and signals the end of the correction trend.