Shiba Inu (SHIB) is currently stabilizing above a significant demand zone, with price action and technical indicators pointing toward a possible short-term recovery. After a brief rejection from its recent local high, SHIB has entered a region that has historically triggered buying interest, creating a potentially favorable setup for bullish momentum.

At the time of writing, SHIB was trading just above the $0.00001413 support level. This price area has acted as a demand zone in previous cycles, where buyers stepped in to defend the level and initiate upward movement. The price reaction here suggests that market participants may once again be looking at this level as an opportunity.

Oversold RSI Hints at Reversal Potential

One of the strongest arguments for a potential recovery comes from the stochastic Relative Strength Index (RSI), which is approaching oversold territory. This technical signal is often viewed as a precursor to price rebounds, particularly when aligned with established support zones.

Historically, oversold RSI conditions near key support levels have provided a foundation for trend reversals. In this case, the convergence of the oversold stochastic RSI and the $0.00001413 demand zone could enhance the probability of a near-term upward move in SHIB’s price.

Mixed On-Chain Metrics Suggest Caution

Despite the positive technical outlook, some on-chain metrics are sending mixed signals. Data from CryptoQuant shows that the number of active SHIB addresses has been in decline since May 11. The metric dropped from over 5,000 to approximately 3,200 active wallets within a few days.

A decrease in active addresses generally reflects reduced engagement and transaction activity on the network. This may indicate weakening interest from retail investors or traders in the short term, which can weigh on price recovery efforts.

However, this drop in activity has been counterbalanced by a notable increase in SHIB exchange inflows. Over the past 24 hours, there has been a sharp rise in the number of tokens being transferred to centralized exchanges. While such inflows are sometimes associated with selling pressure, in the current context, they may signal a different narrative.

Given the price’s proximity to a demand zone and the presence of technical support, the rising inflows could indicate that traders are preparing for a possible breakout rather than an immediate sell-off. In other words, investors may be moving their tokens in anticipation of capitalizing on a potential price rally.

Technical Structure Holds Despite Pullback

From a price action perspective, SHIB continues to maintain a bullish structure despite the recent correction. The pullback from the $0.00001764 level did raise concerns about short-term momentum, but so far, the asset has held firm at support.

The ability to remain above the $0.00001413 level is significant. It shows that buyers are still willing to step in at this zone, which helps maintain upward pressure. As long as SHIB defends this level, the possibility of a recovery remains valid, supported by the oversold RSI and potential accumulation behavior.

Outlook: Bullish Potential If Support Holds

The current scenario presents a balance between positive technical indicators and weaker fundamentals. The stochastic RSI and historical demand zone suggest that the asset could recover in the near term. At the same time, declining network activity serves as a reminder that retail interest is not as strong as it was in earlier phases.

Nonetheless, the recent uptick in exchange inflows and the resilience of the $0.00001413 support level provide grounds for cautious optimism. If SHIB can maintain its position above this level, it may attract renewed buying interest and build momentum for another attempt to break recent highs.

Looking ahead, traders and investors should monitor whether the support zone continues to hold, and watch for confirmation through increased volume or a positive shift in on-chain activity. A sustained move above this level, backed by improving network engagement, could open the door for a broader upward trend.