Shiba Inu, down 10% in 7 days but showing reversal signs... Has it really hit rock bottom?

▲ Shiba Inu (SHIB)/AI generated image

A weekly chart analysis suggests that Shiba Inu (SHIB) is holding above a long-term support line near its historical low, indicating that the multi-year bearish pressure may be nearing its end.

According to crypto news outlet NewsBTC on May 26 (local time), Shiba Inu's open interest recently increased by 2.1% over the past 24 hours, but spot trading volume decreased by 18%. Shiba Inu is currently trading around $0.0000056, and after a 10% drop over the past 7 days, it has returned to a key support zone around $0.0000055.

This support line has prevented price declines multiple times since its initial movement in 2021. Despite repeated tests, selling pressure has not been able to create a sustained breakdown below this zone. However, the broader chart structure remains within a contracting descending triangle that has suppressed Shiba Inu's price since its 2021 peak. Each time Shiba Inu attempts to recover, it has been halted by a declining upper resistance line, and this pattern remains the dominant structure on the weekly chart.

Analyst Aurex Finance, who posted on TradingView, suggested the possibility that Shiba Inu's 3-wave corrective structure has been completed. The first wave pulled the price down from its March 2024 high of $0.000045 to $0.000010 in August 2024. This was followed by a partial recovery, rising to $0.000033 in December 2024, but the third wave pushed the price back down to the bottom of the triangle, leading to its current position.

Aurex Finance analyzed that the 3-wave decline appears to have concluded just above the long-term support zone. This area, where wave completion and the support line converge, is considered a point where multiple signals gather in technical analysis. For this reason, it has been suggested that the multi-year correction may be entering its final phase.

For a rebound, two distinct barriers must be overcome. The first is the descending resistance trend line around $0.000011, and the second is the recovery high from late 2024, around $0.000033. Shiba Inu must break through both of these zones for the market structure to change significantly and for buyers to regain control. Until then, the long-term trend remains technically weak, and the triangular structure that has compressed the price for years could create sharp volatility when a breakout occurs in either direction.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. This content should be interpreted for informational purposes only.*