Key Takeaways
Shiba Inu has declined sustainably for the past eight months, dropping 16% in 30 days. An analyst eyes a 125% rebound to $0.000028 despite prevailing conditions.
Since reaching $0.0000334 eight months ago, Shiba Inu [SHIB] has struggled, making significant losses across the charts.
In fact, as of this writing, Shiba Inu was trading $0.0000125, marking a 1.61% jump on daily charts.
Before these moderate gains, SHIB had been on a downward trajectory, dipping by 8.09% and 16% on weekly and monthly charts.
Despite a strong downward momentum, crypto analysts, especially Alphractal founder Joao Wedson, eye a massive recovery.
On-chain data signals recovery
According to Wedson, Shiba Inu’s on-chain data indicates that the memecoin is currently in an accumulation phase.
Realized Cap Impulse has signaled a shift to positive. When this metric starts to turn positive, it suggests that Shiba Inu is experiencing fresh capital inflow.
Source: Alphractal
Buyers have started to return to the market, with Shiba Inu recording a positive delta for two consecutive days.
According to Coinalyze, Shiba Inu recorded $1.2 trillion in buy volume compared to $1.1 trillion in sell volume between the 20th and 21st of August.
Source: Coinalyze
On top of that, Alphractal’s Alpha Price signaled that SHIB is on a path towards a 125% jump if demand recovers significantly.
A price hike from current market rates will see SHIB rally to $0.000028, according to Wedson’s projections. Historically, a higher demand has preceded higher prices as upward pressure on an asset mounts.
Source: Alphractal
However, many Shiba Inu owners are currently holding onto unrealized losses, which has kept investors hesitant to make a comeback.
Therefore, despite the current indecision in the crypto market, SHIB is poised for accumulation to turn into an upward breakout.
Source: Alphractal
Demand for Futures spikes once again
Significantly, as buyers returned to the spot market, so did the demand for Futures positions.
According to Coinalyze, Shiba Inu’s Funding Rate turned positive once again after being negative for the past three days.
Source: Coinalyze
Usually, when the Funding Rate turns positive, it suggests increased capital inflow into the Futures market as investors open new long positions.
Meanwhile, the memecoin’s Long/Short Ratio jumped to 1.169, with longs accounting for 53% and shorts accounting for 46%.
Source: CoinGlass
Typically, when long positions dominate, it implies participants are bullish and are actively betting for a price rebound.
A trend reversal ahead for SHIB?
According to AMBCrypto’s analysis, Shiba Inu is experiencing strong downward momentum as investors take a step back from the market.
For that reason, the memecoin’s Relative Strength Index (RSI) declined to 44, edging into bearish territory. Likewise, its Directional Movement Index (DMI) dipped from 26 to 16, further confirming strong bearish momentum.
Source: TradingView
When these indicators are in such a manner, they signal a strong downtrend and its potential to continue.
Having said that, if buyers continue to sit on the sidelines, a recovery in the near term is unlikely, and a drop to $0.0000115 is likely.
However, if speculative buyers re-enter the market, we could see a rebound to $0.000015 resistance. For now, the 125% rally predicted by Wedson seems unlikely, unless it occurs in the long term.
