Shiba Inu (SHIB) has been in a consistent downtrend, mirroring the broader bearish sentiment in the crypto market. Over the past month, SHIB has plunged by 25.3%, and in the last week alone, it dropped by 9.4%.
Despite a minor 0.3% uptick in the past 24 hours, SHIB remains under pressure. Key on-chain metrics, including Open Interest and whale transactions, indicate a lack of momentum. Can SHIB bounce back, or is further downside expected?
Declining Open Interest: A Sign of Weakness?
One of the major reasons for SHIB’s decline is the consistent drop in Open Interest (OI), which reflects the number of outstanding derivative contracts (futures and options) yet to be settled.
A falling OI suggests that traders are closing positions, reducing speculation, and weakening market confidence.
📉 According to Coinglass:
- SHIB’s Open Interest fell by nearly 10% in the past 24 hours, now valued at $105.94 million.
- SHIB’s OI volume declined by 12.57% in the same period, standing at $77.41 million.
This declining trend indicates low trader interest, making it harder for SHIB to recover without fresh buying pressure.
Whale Activity Hits Multi-Month Lows
Whale accumulation has also weakened, adding to SHIB’s struggles. Large investors (whales) play a key role in influencing market liquidity and sentiment. However, recent data shows a sharp drop in whale transactions.
📊 IntoTheBlock Data:
- SHIB whale transactions have declined by over 80% since January.
- From 698 transactions in January, whale activity has now dropped to just 52 transactions.
With whales reducing exposure to SHIB, the market could lack the momentum for a strong recovery unless large-scale accumulation resumes.
Can SHIB Bounce Back? Signs of a Potential Reversal
Despite the bearish indicators, SHIB’s price action suggests a possible bounce:
- SHIB has cleared a key trendline liquidity zone, which could trigger a short-term price reversal.
- SHIB has entered a demand zone, a critical support level where buying interest could increase.
However, for any meaningful recovery, SHIB needs:
- A rise in Open Interest and trading volume
- Increased whale accumulation
- A breakout above key resistance levels
If these conditions are met, SHIB could regain momentum. Otherwise, the bearish trend may persist, potentially pushing SHIB lower in the short term.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your own research before making any investment decisions.
Note: This article has been refined and enhanced by ChatGPT.
