What’s next as Shiba Inu reverses 2023’s gains

• Higher-timeframe was bearish with a downtrend momentum. 
• The futures market was slightly bearish at press time.

The ongoing bearish sentiment in Q2 has cleared all gains Shiba Inu [SHIB] made in 2023. It has dropped from $0.00001575 in mid-February to 2022 December’s low of $0.00000780 as of press time. 

Based on the market structure, SHIB was firmly bearish with a downtrend momentum on the daily chart. Although it could flip bullish if it closes above $0.00000968, a weak Bitcoin [BTC] below $26.6k could make such a feet difficult. 

When will bulls see reprieve?

In early May, SHIB consolidated between $0.00000839 – $0.00000903 (the parallel channel, cyan). But it breached the parallel channel’s range low on 5 June. The extended drop has hit a confluence area of a Fib level/December lows and the descending channel’s (white) mid-range.  

The descending channel captures SHIB’s downtrend since mid-February. Although SHIB has hit a potential inflection point at the December lows of $0.00000780, a weak BTC could dim the chances of a solid corrective rebound. 

It is worth noting that SHIB rebounded strongly at $0.00000780 in December 2022 and June 2022. The 50% Fib level of $0.00001178 was the immediate target in both 2022 recovery scenarios. 

A repeat of the 2022 trend is feasible if BTC surges beyond $27k and SHIB flips bullish by closing above the 23.6% Fib level. 

However, a weak BTC below $26.6k could crack SHIB’s $0.0000780 price floor. Such an extended plunge could ease at the range low of the descending channel or $0.00000593. 

Bearish sentiment persists

Source: Coinglass

The overall exchange accounts between long and short positions showed short positions at 53.98% dominance on the 12-hour timeframe as of press time. 

It means more accounts were bearish on SHIB on the futures market, which could dim strong recovery prospects in the near/mid-term. Investors should track BTC price action alongside next week’s FOMC meeting announcement for optimized trades. 

Source