- Shiba Inu flashed a sign of bullish intent in the speculative markets, but the sentiment quickly turned neutral.
- The triangle pattern development threatened a bearish trend reversal.
Shiba Inu [SHIB] broke out of a lower timeframe channel last week. This move sparked bullish hopes, but turned out to be a false alarm.
The memecoin saw increased speculative activity less than 24 hours ago, but technical indicators showed that demand had slowed down.
The descending triangle pattern and liquidation data showed that a price drop was imminent. The question was, how deep would the drop be?
Shiba Inu bears threaten a 9% price drop
The meme coin saw a bullish breakout in the second week of May, but the trend could not advance beyond $0.000017. This resistance level marked a lower high from mid-February.
Over the past three weeks, Shiba Inu has sunk toward the former range highs at $0.000014.
The 20 and 50-day moving averages showed that momentum was still bullish, but has weakened considerably. The SHIB market structure was on the verge of flipping bearishly.
A session close below $0.0000142 would achieve this structure shift.
The CMF has sunk to the zero level, indicating that capital flow did not favor either buyers or sellers. The OBV has been moving sideways in May.
Shiba Inu’s lower highs in recent days formed a descending triangle pattern (yellow). The weakened momentum and falling demand suggested that this pattern could mark a bearish trend reversal.
Source: CoinGlass
The liquidation heatmap agreed with this finding. The 1-month heatmap noted a cluster of liquidity just under $0.000014, the former range highs, and the current support level.
This concentration of liquidation levels has built up over the past ten days.
It was close to the Shiba Inu market price. Combined with the triangle pattern noted earlier, it was highly likely that SHIB would see a 3% drop soon.
This could open the floodgates to the sellers and drive the memecoin toward the mid-range support at $0.0000129, a 9.3% drawdown from the current price.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
