Short-term investors may face serious repercussions after Shiba Inu ($SHIB ) recently breached a critical support level. The price of Shiba Inu has dropped by nearly 3% today, currently trading at around $0.00001187, which is well below the critical technical barrier at $0.00001231, which served as a launching point for the rallies in April and May.
After several failed attempts to break through the resistance level near the 50 and 100-day exponential moving averages, which are currently converging around $0.0000138-$0.0000140, the market broke through this level. The asset's price has fallen to such a bearish zone that the 200-day exponential moving average, which lies above at $0.00001546, has remained static for weeks. The volume of this sudden collapse is also concerning given the lack of clear buying support to intervene, leaving Shiba Inu vulnerable to further declines.
The Relative Strength Index (RSI) at 32.79 indicates that the token is nearly oversold, but it is too early to consider this a buying opportunity at lower prices in the absence of any clear reversal signals. Currently, investors should not expect a recovery unless SHIB can quickly and strongly reclaim the $0.0000123 level.
Otherwise, momentum is likely to push the asset towards the psychological level of $0.00001000, which is an important approximate figure and the last line of defense before panic selling escalates. The overall market sentiment exacerbates the situation. In times of reduced risk appetite, meme-based assets like SHIB are usually the first to be sold. It makes sense to expect further declines or at most stagnation unless there is an unexpected catalyst (like a burn incident, whale movement, or integration news, for example).
A direct hit to Bitcoin
After a record recovery, all eyes are on what will happen to Bitcoin ($BTC ). Immediately after the 50-day exponential moving average, Bitcoin experienced a rapid reversal towards $105,000, following a sharp drop to $102,816. This reversal at a critical technical support level indicates significant buying interest at dips, along with potential algorithmic activity near the moving averages.
This action was taken shortly after a significant series of liquidations we previously mentioned, which involved a prolonged series of liquidations that exceeded expectations and led to the liquidation of excessively leveraged positions. As selling pressure subsided and buyers stepped in at the support level, this strong influx paved the way for a counter-movement. However, one factor cannot be overlooked: the decline in trading volume. Trading volume has not increased in proportion to the strong candle recovery.
A lack of conviction from the bulls may indicate that this is a temporary bounce and not a return to trend. It makes sense for market participants to exercise caution. Although there may still be room for progress without exceeding the overbought area, the Relative Strength Index, currently at 53.75, indicates that momentum is not as strong as when Bitcoin tested its all-time high of $112,000 in early June.
This level remains the main psychological barrier, and re-testing may take longer if there is no clear catalyst. In the short term, optimists are likely to maintain control if Bitcoin's price stays above the 50-day exponential moving average (around $103,000) and does not fall below $102,000. The 100-day exponential moving average may provide the next line of defense if the risk level returns to $98,000.
The last chance for $XRP
Although XRP is holding onto its last line of defense, optimists may need it for planning a sharp reversal. The currency has retreated towards the 200-day moving average, which is now a critical turning point for any potential recovery, and it is currently trading near $2.14. Despite the recent rejection in the $2.40-$2.50 range, XRP has not yet achieved a clear breakout.
The moving averages are converging, especially the 50, 100, and 200-day exponential moving averages, compressing the price in a tight structure, indicating that high volatility movement may be imminent. Despite the red candles, this consolidation may serve as a traditional launch point. With the Relative Strength Index still neutral at around 45, neither side has faced severe exhaustion yet.
A rebound towards $2.60 may still occur, followed by a re-test of $3 in the end, if optimists defend the $200 exponential moving average and the price remains above $2.09. But for now, pessimists are gaining momentum. During the past few sessions, trading volume has declined, indicating that neither side is fully convinced. On a bearish day, if trading volume increases and XRP closes below the $200 exponential moving average, the market is likely to see a sharp sell-off towards $1.85 or lower.
However, for traders and long-term investors, this may be a unique opportunity when considering entering the market. Given the absence of structural collapse currently and a slow leak to the main support level, the current situation resembles previous XRP price movements that preceded significant reversals.
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