Can SHIB Break Out of this Compact Range
In the last two weeks, the price of the ShibaInu token has been trading within a compact range. The price of the meme token has been between the lows and highs of $0.00000697 and $0.00000760.
Even though there has mostly been sideways movement, there are increasing changes of it breaking out from the range.
The last 48 hours saw the price of the ShibaInu token drop by 6.5%, which suggests that it could be a bearish breakout.
Selling pressure
Since mid-August, the market structure of the ShibaInu token on the lower and higher timeframes has been bearish.
There was a wave of sell-offs after the price of the meme token was rejected at the price zone of $0.00001, which resulted in a decline below the bullish stronghold of $0.00000807.
Even though this price level had seen bullish pullback, the level had turned into resistance due to selling pressure early in September.
Even though the price has been higher than the $0.00000807 level since it flipped to resistance, there could be a further drop in the ShibaInu token because of further bearish activity.
The indicators
The Relative Strength Index (RSI) of the second-largest meme token in the market was under the neutral level of 50, which highlighted the high selling pressure.
In addition, there was a sharp decline in the ChaikinMoney Flow (CMF), as it went from positive to negative in the range period.
If there is a successful bearish breakout, the sellers could target the lows recorded in June at $0.00000651.
But, there could also be a surprise rally in the price of the SHIB token in the event of Bitcoin managing to rally above the $27,000 mark.
Open interest
According to data from Coinalyze, there has been a downtrend recorded in Open Interest (OI). In the last 24 hours, it has recorded declines of 3.57%, which has reiterated the bearish bias seen on the price chart of the SHIB token.
Furthermore, there was a fluctuation in the funding rate on the lower timeframes, which hinted at an absence of sustained momentum.
This indicated that there could be further declines in the price of the ShibaInu token in the long-term.
Even though Shibarium has been enjoying widespread adoption and activity and the SHIB burn rate has gotten a boost, it has not translated into gains for the SHIB token.
While this could be worrisome, the fact is that the downtrend has been seen in the broader crypto market.
Therefore, there is a possibility that a recovery in the wider crypto market might spark a rise in price for the ShibaInu token as well.
