Despite recording an 11.88% drop over the past week, Shiba Inu (SHIB) may be nearing the end of its short-term downtrend. While broader market sentiment in the memecoin sector remains tepid, technical indicators and rising liquidity inflows are signaling potential for a bullish breakout.
Bullish Triangle Pattern Signals Possible Rally
SHIB’s price action has formed a bullish triangle pattern, defined by a descending resistance line and a horizontal support base. Typically, assets trapped in such formations consolidate before staging a breakout through the resistance. In SHIB’s case, a breakout could lead to a 39% surge, pushing prices toward $0.00001765.
Liquidity inflows are also increasing, with the Money Flow Index (MFI) at 35.67 and trending upward. A sustained move above 50 on the MFI could confirm strong buyer interest and support the breakout scenario. However, the bulls need to confirm their commitment with a decisive candle close above the resistance line for the rally to be validated.
Broader Memecoin Sector Still Lagging
While SHIB shows individual signs of recovery, the broader memecoin market continues to underperform. According to Artemis data, memecoins declined by 15.2% over the past seven days, placing them among the bottom four performing crypto sectors.
This trend indicates a sector-wide liquidity outflow, which could limit SHIB’s upside potential unless sentiment improves. Still, a reversal in the memecoin sector could provide a tailwind, encouraging capital inflows back into SHIB and other leading tokens.
Also Read: Shiba Inu (SHIB) Risks 9% Drop Amid Bearish Pattern
Technical Indicators Suggest Rebound Potential
Beyond the triangle pattern and MFI, additional bullish confluences are emerging. SHIB is currently trading near the lower Bollinger Band, often a sign of oversold conditions and a potential precursor to buying interest.
This lower band also coincides with SHIB’s key support level, reinforcing the case for a bounce. If current conditions hold and broader market sentiment shifts, SHIB could be poised for a notable recovery in the coming days.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
