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Shiba Inu’s recent price action paints a cautious picture for traders and holders alike, as the cryptocurrency battles to hold above a critical support level. After briefly rallying in early May, Shiba Inu has slipped nearly 17% from its local high and now trades around $0.00001460. This decline follows a failure to sustain momentum despite a wave of community excitement and increased blockchain activity.
The early-May rally was raised by multiple catalysts, including heightened enthusiasm around Shibarium, Shiba Inu’s Layer-2 blockchain, and bold predictions from the project’s marketing lead. At one point, Shibarium’s total value locked (TVL) surged by over $1.5 million, reaching a total of $3.79 million. Optimism also grew from a sudden spike in Shiba Inu’s token burn rate, with a staggering 106,040% increase in daily token destruction recorded on May 17.
However, despite these bullish headlines, Shiba Inu’s price failed to maintain its gains. On the same day as the record burn spike, SHIB dropped more than 5%, producing a lower high on the chart and signaling weakness in the trend.
Technical Indicators Show Persistent Bearish Structure
Currently, Shiba Inu’s price is struggling to stay above the 20-day exponential moving average (EMA) near $0.00001450. Meanwhile, resistance at the 50-day EMA continues to hold firm, maintaining a bearish EMA stack. This technical formation typically suggests that sellers remain in control unless a clear breakout occurs above multiple moving averages.
For SHIB to reverse this bearish setup, it would need to reclaim the $0.00001589 level, which also aligns with the 38.2% Fibonacci retracement. Without strong buying volume and momentum, a move above this level appears unlikely in the near term.
Momentum indicators are also turning against Shiba Inu. The Relative Strength Index (RSI) has dipped to 52.4, down from its recent high of 59.7. This decline indicates that bullish strength is fading. At the same time, the Chaikin Money Flow (CMF), a key measure of capital inflow, has dropped into negative territory at -0.06, a sharp reversal from +0.18 just weeks earlier. This change suggests that money is flowing out of SHIB rather than into it, highlighting reduced accumulation interest.
Support and Resistance: The Levels to Watch
SHIB is currently hovering near the $0.00001375 level, which corresponds to the 23.6% Fibonacci retracement. A break below this support could open the door for further declines, with $0.00001200 and $0.00001029 standing out as major downside targets. On the flip side, reclaiming and closing above the $0.00001450 to $0.00001600 range with strong volume could revive hopes for a near-term recovery.
Until such a breakout occurs, traders are likely to remain cautious, and any rally could face immediate selling pressure from holders looking to recover losses.
On-Chain Metrics Reveal Weak Market Confidence
On-chain data further supports the bearish outlook. Whale behavior has shifted significantly in the past 30 days, with large holder netflows dropping by 311%. This suggests that major investors have reduced their exposure to SHIB, possibly offloading tokens during the early May rally. Whale outflows surged over 1000%, indicating that some used the brief rally as an exit point rather than a reason to accumulate.
Retail activity has also weakened sharply. Active addresses have declined from 238,000 in December to just 75,000 currently, a steep drop that underscores waning retail interest. At the same time, futures open interest in SHIB has declined significantly since January, falling from $542 million to much lower levels. This suggests that traders are stepping back from leveraged positions, likely due to unclear market direction.
Profitability is another concern. Only 17% of SHIB holders are currently in profit, while more than 80% are holding at a loss. This means that even minor rallies could trigger selling as traders look to break even, which might cap any short-term upward moves.
Conclusion: Trend Remains Bearish Unless Key Levels Reclaimed
Shiba Inu remains under pressure, both technically and fundamentally. The failure to break through the $0.00001600 level leaves the trend in bearish territory, and price risks intensify if support at $0.00001375 is lost. Unless a strong reversal backed by volume and whale accumulation takes place, downside movement toward $0.00001200 or even $0.00001029 remains a possibility in the coming weeks. For now, the bias remains bearish until proven otherwise.
