The mainstream canine coin Shiba Inu (SHIB) continues to trade below the $0.00001 historical resistance levels, but several on-chain metrics point to SHIB being under-valued. Firstly, the Stochastic Relative Strength Index (StochRSI) is hovering at the range between 29 to 34, confirming the oversold condition.
The regular RSI points to the same direction, but Shiba Inu’s (SHIB) price continues to trade at just $0.00000710, risking dropping to $0.00000505 support zone if this level doesn’t hold. On top of that, the Donchian Channels (DC), a popular trend-following trading technique, says Shiba Inu’s oversold price might signal a strengthening bearish trend.
Shiba Inu’s Oversold Status Isn’t What It Seems
Created by Richard Donchian, the veteran American commodity trader’s instrument follows a similar pattern to the Bollinger Bands (BOLL), consisting of three bands that ultimately channel a bearish or bullish sentiment. For instance, crossing over the highest band numerous times during the week definitely implies mounting bullish momentum.
Conversely, if the digital asset hits the lowest-tier channel multiple times and corries on trading downwards, this showcases the asset’s weakness to rebound. In Shiba Inu coin’s (SHIB) case, the Donchian channels suggest $0.0000803 must be reclaimed for a trend switch, while the $0.00000905 upper band serves as a potential breakout spot.
That being said, stagnant figures in Shiba Inu’s trading volumes on both Spot & Futures crypto markets paint a dim picture in the near-term. The funding rates are flashing all-red on both Shiba Inu & 1000-SHIB smart contracts, with the daily Futures trading volume not exceeding $100 million combined together, says real-time stats from CoinGlass.
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Shiba Inu enters oversold territory when its RSI drops below 40 (recently hitting as low as 14), indicating heavy selling pressure that often exhausts itself & sets up potential short-term price rebounds.
Failed rebounds from the lower band (especially with lingering oversold RSI) indicate bearish continuation, as the trend absorbs potential buying without reversing.
Price hugs or repeatedly tests the lower band over several periods, combined with expanding channel width downward or no close above the middle band.
Prepare for potential lower breaks by tightening stops below key supports (such as $0.000007); a close above the upper/middle band would invalidate and signal reversal.
Ongoing sell pressure, zero recent burns, and high exchange supply keep downside risks alive; a failed bounce could push SHIB lower if it breaks key supports like $0.000007.
