Shiba Inu (SHIB) is currently facing a challenging phase as bearish sentiment deepens across the market. Over the last 24 hours, SHIB has seen a price decline of 3.5%, trading around $0.0000119 at the time of writing. The drop comes amid a broader market slowdown and weakening investor interest, especially in high-volatility assets.

Accompanying the price decline was a significant 17% drop in SHIB’s trading volume. This reduction in activity suggests that both retail and institutional traders are showing less interest in the asset, reflecting a cautious stance amid the ongoing uncertainty in the broader crypto market. With traders hesitant to commit capital, SHIB’s near-term outlook remains under pressure.

Technical indicators further highlight the bearish momentum. Since December 2024, SHIB has been trading within a descending channel pattern—a formation typically characterized by lower highs and lower lows. This price action reflects a consistent downtrend, with bulls failing to break key resistance levels and sellers maintaining control.

Recently, SHIB made an attempt to break out above the upper boundary of this descending channel. However, that effort was unsuccessful, and the token has since returned to the upper edge of the range, a level that has historically acted as a turning point for further downward moves.

If SHIB fails to break above this resistance, analysts suggest the asset could face a sharp correction of up to 30%. This would potentially send the price down to the $0.0000084 level, marking the lower boundary of the channel. This key level may act as support, but it also represents a significant downside risk from current prices.

Adding to the concerns is SHIB’s position below both the 50-day and 200-day Exponential Moving Averages (EMAs) on the daily chart. Trading below these major moving averages indicates continued weakness and a lack of bullish momentum. Unless a significant shift in sentiment occurs, SHIB may remain under downward pressure in the near term.

While a bullish reversal is still possible, technical analysis suggests it would require one of two key developments. The first is a notable shift in broader market sentiment that lifts risk assets across the board. The second is a confirmed daily candle close above the $0.0000128 level, which would invalidate the descending channel pattern and potentially trigger renewed buying interest.

On the sentiment front, on-chain data shows traders are overwhelmingly betting against SHIB. According to data from analytics platform Coinglass, 61.91% of top traders currently hold short positions on the asset. This is reflected in the Long/Short Ratio, which sits at 0.615—clearly indicating bearish dominance.

Leverage data further supports this view. At the time of writing, SHIB traders were heavily leveraged at two key price levels: $0.0000117 as a support zone and $0.00001245 as a resistance zone. Long positions amounted to approximately $375,000, while short positions totaled a significant $952,000. The clear imbalance suggests that short sellers currently have a strong grip on the market and may push prices lower if no bullish trigger emerges.

As SHIB continues to trade within this descending channel, its next move will likely depend on whether it can break resistance or if sellers continue to dominate. For now, the technical setup and sentiment data point toward a cautious outlook. If price fails to gain traction above resistance and volume remains low, the risk of a deeper correction grows stronger.

In summary, Shiba Inu is at a critical juncture. Despite past popularity and community backing, the asset is currently being weighed down by negative sentiment, technical weakness, and declining participation. Unless a breakout occurs soon, long-term holders may need to brace for further downside.