Shiba Inu Price Faces Channel Support Amidst Bearish Markets
Shiba Inu (SHIB) has shown remarkable resilience in the face of a broader market crash, despite significant challenges.
Since July 3, SHIB’s price has fallen by over 26%, reaching a daily low of around $0.0000128 on July 5. However, it has since recovered, indicating a strong buying sentiment at lower price levels.
Amidst these challenges, SHIB has witnessed a noteworthy increase in its weekly burn rate, rising by an impressive 466% over the past week. The Shibburn X account reports that over 364 million SHIB tokens were burned in the last seven days. This increase in burn rate suggests that the community is actively driving scarcity and long-term value. It also reflects a strategic effort to manage supply, which could eventually lead to a more favorable supply-demand balance.
This is particularly significant as the broader market begins to recover, positioning SHIB for potential price appreciation.
Furthermore, BitMEX, a crypto exchange, has introduced MEMEMEXTUSDT, a Basket Index perpetual swap contract that includes top meme coins. This investment vehicle allows traders to access a diversified portfolio of leading memecoins through a single instrument, with SHIB being one of the tokens included in the basket. SHIB fans view this as a step towards a SHIB ETF.
In terms of price action, Shiba Inu’s price saw a 16% increase on July 5, defying the bearish trend in the wider market. The memecoin continued its upward momentum on July 6, attempting to turn the $0.000015 resistance into support.
However, the price movement of SHIB is currently within a descending channel pattern, which adds complexity to the situation. Currently, SHIB is hovering near the support line of the channel, indicating the potential for a rebound from this level.
If SHIB can maintain this support, a recovery rally could push the price towards the resistance level of 0.00001579, corresponding to the 61.8% Fibonacci retracement. Further upward momentum could target the resistance of the 20-day EMA (red wave) at 0.00001787, near the 78.6% retracement.
On the other hand, if selling pressure persists, SHIB could drop to the support level around 0.00001334, aligning with the 38.2% Fibonacci retracement. A break below this level may test the stronger support at 0.00001190, corresponding to the 23.6% retracement.
Currently, the token is trading below its 20, 50, 100, and 200-day EMAs, indicating a bearish trend. The RSI is at 29.81, suggesting that SHIB is in oversold territory and may experience a potential rebound.
Shiba Inu’s price action is at a critical juncture, and the support line of the descending parallel channel is a key factor to monitor for a potential reversal.