Shiba Inu (SHIB) has been facing significant challenges in February 2025, with the price dropping by 30%, a decline that has left the cryptocurrency trading well below $0.000020. The market capitalization now stands at $8.25 billion, a notable decrease from previous levels. However, despite the ongoing downturn, technical indicators are showing mixed signals, suggesting that a trend reversal might be possible in the near future, although there are still challenges ahead for SHIB holders.

RSI Shows Potential for a Short-Term Rebound

The Relative Strength Index (RSI), a widely used indicator to determine whether an asset is overbought or oversold, has recently shown signs of recovery. SHIB’s RSI reached oversold levels, dropping to as low as 21.6. This marked a period of intense selling pressure. However, the RSI has since recovered to 34.5, signaling that the downward momentum is slowing down. When the RSI is below 30, it generally indicates oversold conditions, and a recovery is often expected. However, with the current RSI still below the 40 threshold, bearish sentiment persists in the market. For SHIB to break free from its bearish trend, its RSI would need to rise above 40, signaling a potential shift towards buying pressure. If the RSI dips back below 30, however, it could lead to another wave of selling, prolonging the current downtrend.

BBTrend Turns Positive, Indicating Some Buying Interest

Shiba Inu’s BBTrend indicator, which is derived from Bollinger Bands and measures the strength and direction of a trend, has also shown some improvement. After remaining negative for several days, the BBTrend has shifted to a positive value of 5, up from -1.55 just a day earlier. This change in the indicator suggests that buying interest is beginning to gain momentum. The shift from negative to positive indicates that some buyers are starting to enter the market, possibly anticipating a short-term recovery.

However, while this is an encouraging sign, the BBTrend remains relatively low compared to previous rallies, signaling that the buying momentum is still fragile. For this positive trend to continue, the BBTrend would need to strengthen further. A continued increase in the BBTrend would support a more sustained shift towards bullish sentiment. On the other hand, if the BBTrend starts declining again, it could point to a fading buying interest, which may lead to another pullback in SHIB’s price.

EMA Setup Remains Bearish, Indicating Persistent Selling Pressure

While some indicators suggest potential for a short-term rebound, the Exponential Moving Averages (EMA) for SHIB remain in a bearish setup. The short-term EMAs are positioned below the long-term EMAs, suggesting that selling pressure is still dominating the market. In the event that the current downtrend continues, SHIB may face significant support around the $0.0000116 level. If this support is breached, the price could fall below $0.000012, a level not seen since August 2024.

However, if SHIB is able to break through the resistance at $0.0000146, it could trigger a rally towards $0.000017. Breaking through that level would open up the potential for further gains, with the next resistance at $0.0000196. If SHIB manages to surpass that resistance, the cryptocurrency could see a more sustained recovery, potentially breaking above the key $0.00002 level.

A Golden Cross Could Signal a Trend Reversal

One of the potential indicators of a more significant trend reversal would be the formation of a Golden Cross. This occurs when the short-term EMAs cross above the long-term EMAs, signaling the beginning of a new uptrend. If SHIB manages to form a Golden Cross, it could signal a shift from bearish to bullish sentiment, allowing for a more sustained upward movement. Until that happens, the bearish EMA setup remains in place, indicating that the market is likely to continue facing downward pressure.

Conclusion

Shiba Inu’s recent 30% decline in February has left the cryptocurrency in a precarious position. While indicators like RSI and BBTrend show some signs of recovery, the overall market sentiment remains uncertain. The bearish EMA setup suggests that selling pressure is still dominant, but if SHIB can break key resistance levels and trigger a Golden Cross, a trend reversal could be on the horizon. For now, the cryptocurrency is in a fragile state, with both bearish and bullish signals present. Investors will need to closely monitor these technical indicators to gauge the potential for a sustained recovery.