The market has suffered an unexpected blow and may not recover quickly.
After Shiba Inu (SHIB) recently broke through a key support level, short-term holders may face severe impacts. SHIB has dropped nearly 3% today, currently trading at around $0.00001187, well below the critical technical barrier of $0.00001231, which had been a springboard for rebounds in April and May.
After multiple failed attempts to break through the resistance near the 50-day and 100-day moving averages (currently converging at $0.0000138 - $0.0000140), the market broke through this resistance level. The asset has fallen into a bearish zone to the extent that the 200-day moving average (above $0.00001546) has remained unchanged for several weeks. The trading volume during this breakout is also concerning, as there is no obvious buying support to step in, putting SHIB at risk of further declines.
The RSI is at 32.79, indicating that the token is approaching oversold conditions, but it is too early to identify this as a buying opportunity without any clear reversal signals. For now, unless SHIB can quickly and strongly reclaim the $0.0000123 region, investors should not expect a rebound.
If not, momentum may push the asset down to the psychological price level of $0.00001000, which is an important integer and the last line of defense before panic selling intensifies. The overall market sentiment exacerbates this situation. In periods of reduced risk appetite, meme-based assets like SHIB are typically the first to be sold off. Unless unexpected catalysts (like burning events, whale activity, or consolidation news) occur, it is reasonable to expect prices to decline further, at best stagnate.
Direct impact on Bitcoin
After a typical recovery, everyone is focused on Bitcoin (BTC)'s next moves. Bitcoin quickly retraced to $105,000 after falling below the 50-day moving average, having previously dipped to $102,816. Such a strong rebound at a key technical support level indicates positive buying interest at lower prices and potential algorithmic operations near moving averages.
This action was taken shortly after the large-scale liquidation waterfall we reported earlier. The waterfall liquidation consisted of a series of long liquidations that exceeded expectations and cleared excessively leveraged positions. As the sell-off pressure eased, buyers stepped in at support levels, and this strong wave of short covering laid the groundwork for subsequent counterattacks. However, one factor cannot be ignored: the decrease in trading volume. The trading volume did not rise proportionally with the strong rebound of the candlestick charts.
The lack of confidence from bulls may suggest that this is merely a temporary relief bounce rather than a trend reversal. It makes sense for market participants to remain cautious. Although there may still be room for price increases without breaking into the overbought area, the current RSI of 53.75 indicates that Bitcoin's momentum is not as strong as when it reached its historical high of $112,000 in early June.
This level remains a major psychological threshold, and retesting may take longer without clear triggering factors. In the short term, if Bitcoin stays above the 50-day moving average (around $103,000) and does not fall below $102,000, bulls may maintain control. If risk falls back to $98,000, the 100-day moving average could provide the next line of defense.
Last chance for XRP
Although XRP has held its last line of defense, bulls may need it to trigger a sharp reversal. The asset has retreated to the 200-day moving average, which is currently a key turning point for any potential rebound, trading close to $2.14. Despite a recent pullback in the $2.40 - $2.50 range, XRP has not shown any significant breakthrough.
The moving averages, especially the 50-day, 100-day, and 200-day EMA, are converging and compressing the price into a tight structure, indicating that a high volatility trend may be imminent. Despite the emergence of bearish candles, this consolidation could be a traditional springboard pattern. Since the RSI is still around 45 and remains neutral, neither side has shown significant weakness.
If the bulls hold the 200-day moving average and the price remains above $2.09, there is still potential for a rebound to $2.60 and ultimately retesting $3. However, currently, bearish momentum is strengthening. Trading volume has been declining over the past few days, indicating uncertainty on both sides. On up days, if trading volume increases and XRP closes below the 200-day moving average, a larger sell-off could occur, dropping to $1.85 or lower.
However, for traders and long-term investors, considering entry could be a rare opportunity. Given that there has yet to be a structural breakout and key support levels are slowly declining, the current trend resembles that prior to significant pullbacks in XRP's price in the past.
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