Shiba Inu (SHIB), once known purely for its viral popularity, is undergoing a significant shift in purpose—moving beyond its coin status into a more utility-driven blockchain ecosystem. This transformation includes a fresh privacy-focused technology layer and deeper real-world application potential. Yet despite this pivot, recent market action shows the token struggling to stay afloat after a wave of selling activity.

A sell-off involving 211 million SHIB tokens took place just yesterday, sending a wave of caution through the community. The price is now hovering around its weekly lows, prompting questions about whether the asset can find support and recover in the short term.

Privacy-Focused Upgrade Boosts Long-Term Vision

One of the most significant updates in the Shiba Inu ecosystem is the introduction of the Shib Alpha Layer, which is currently in its beta phase. This upgrade focuses on encrypted smart contracts powered by Fully Homomorphic Encryption (FHE), developed in collaboration with the cryptography firm ZAMA.

FHE allows smart contracts to compute on encrypted data without revealing the underlying information—an innovation that could be transformative for decentralized applications (dApps) in fields like healthcare, finance, and identity management. By leveraging this technology on its Shibarium network, the Shiba Inu team aims to support multiple RollApps under a unified, scalable infrastructure.

Although the update adds credibility to the project’s long-term roadmap, the market hasn’t yet reflected that optimism. Instead, the focus remains on short-term price action, especially in light of recent bearish momentum.

Short-Term Technical Picture: Can SHIB Rebound?

At the time of writing, SHIB is trading at $0.00001171—down 1.36% in the last 24 hours and over 12% on the weekly chart. Its market capitalization currently stands at approximately $6.9 billion, with a daily trading volume of around $153 million. The trading activity has shown only a slight decline of 0.60%, suggesting ongoing interest even amid price weakness.

On the 4-hour chart, Shiba Inu remains stuck below the 20-period Simple Moving Average (SMA) of the Bollinger Band at $0.00001194. The price is hugging the lower Bollinger Band, which usually signifies sustained downward pressure. However, a bounce from $0.00001152 in the last few candles indicates some signs of buying support entering the market.

The Relative Strength Index (RSI) is currently at 42.30 and gradually moving upward. While still below the neutral 50 level, this RSI behavior suggests the token may be exiting oversold territory. If momentum continues in this direction, a bullish divergence could materialize—an early indicator of a potential trend reversal.

What Levels Matter Now?

Traders and analysts are closely watching a few key price levels. A move above $0.00001194 could serve as a preliminary bullish confirmation. This level aligns with the midline of the Bollinger Bands, and breaking above it would hint at a shift in market sentiment.

On the flip side, if SHIB slips below $0.00001137, the likelihood of retesting the psychological support at $0.00001100 increases. This would mark a significant breakdown and could trigger further selling unless buyers step in with strong conviction.

Market Sentiment Remains Mixed

Despite the fundamental growth of the Shiba Inu ecosystem, market sentiment remains cautious in the short term. The recent large-scale sell-off adds to this hesitation, although the technology update offers a longer-term reason to remain optimistic.

Social sentiment around SHIB has also cooled compared to earlier peaks, with trading behavior showing more short-term speculation than long-term accumulation. Still, certain on-chain metrics suggest that some wallets are accumulating during dips, possibly in anticipation of future development milestones.

Utility Development May Drive Long-Term Demand

While SHIB’s short-term price outlook remains uncertain, the broader narrative continues to evolve in its favor. The shift toward encrypted, scalable smart contracts on Shibarium represents a notable technical advancement. If these tools prove useful in real-world applications, Shiba Inu could find itself better positioned within the growing decentralized ecosystem.

For now, price action remains the dominant factor in investor decision-making. However, any signs of stabilization or trend reversal in the days ahead may open the door for renewed optimism, especially if accompanied by further developments in the project’s infrastructure.

Conclusion

Shiba Inu’s current price trajectory reflects the weight of recent sell-offs more than the potential impact of its ongoing technology upgrades. Yet as the RSI edges out of oversold territory and a key support level holds, the door remains open for a possible short-term bounce. Investors are watching closely for a move above the $0.00001194 level as a potential sign of recovery. Meanwhile, SHIB’s long-term prospects appear ti