Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
- Shiba Inu has witnessed a bullish rebound from its long-term support, can the bulls reclaim their edge?
- Open interest showed a slight short-term advantage for sellers.
After sliding to its multi-month high on August 14, shiba inus [SHIB] the bears have controlled the trend in their fancy over the past couple of months. As a result, the meme-coin saw a decline below its resistance range of $0.0108 to $0.0109. (For brevity, SHIB prices are multiplied by 1000 from now on).
Meet AMBCrypto Price prediction for Shiba Inu [SHIB] for 2023-24
Recently, the $0.00957 support reignited some bullish pressure as buyers struggled to escape the restraints of the EMA ribbons. An immediate rebound from its immediate support could position the token to challenge EMA resistance.
At press time, SHIB was trading at $0.01021, down 2.17% in the past 24 hours.
SHIB forms a bullish structure on H4, can the bulls sustain a rally?
Over the past week, SHIB’s descent from 2-month trendline resistance (white, dotted) has set the stage for an expected pullback. Thus, the token fell below its EMA ribbons to represent a bearish edge ever since.
As the ribbons EMA have embarked on a bearish reversal, sellers have capped buying efforts near the 50 EMA over the past few days. The bullish engulfing candlestick inflicted a rally that led to double-digit gains on October 13.
A bounce off the $0.01014 level could propel short-term gains ahead of a reversal. In this case, the coin would retest the resistance of $0.01067 before engaging in a trend.
An immediate or eventual close below the $0.01014 mark may expose the token to decline. Under such circumstances, SHIB might witness a bullish invalidation and enter price discovery. An inability of market participants to inflict strong moves may favor a rather compression phase in the $0.0104-$0.01067 range.
Additionally, the Chaikin Money Flow (CMF) lower lows over the past two days have marked a bullish divergence with the price action. This reading reinforced a possibility of a rebound from immediate support.
A fall in price with an increase in open interest
An analysis by SHIB Futures Open Interest found a jump of more than 18% in the past 24 hours. As a result, the price action is down more than 2% over the past day.
Generally, a drop in price accompanied by an increase in open interest indicates that new short positions are being opened.
Overall, buyers would be looking to retake their position above the ribbon EMA, especially with bullish divergence on the CMF. But they need to maintain a position above the current pattern to confirm the bullish bias. The objectives would remain the same as those discussed.
Additionally, alt shares a 52% 30-day correlation with Bitcoin. Thus, keeping an eye on Bitcoin’s movement along with general market sentiment could be key in identifying any bullish invalidation.