Looks like the dog coins are running out of steam.
Both Dogecoin DOGE and Shiba Inu SHIB are back under selling pressure after getting rejected at key resistance levels.
The correction that started last week is still going strong, and the data from derivatives markets is pointing to more downside at least in the short term.
📉 Bearish Sentiment Gaining Ground in Derivatives
Traders are clearly turning cautious on DOGE and SHIB. According to a reliable platform, the long-to-short ratio has dipped to 0.86 for DOGE and 0.82 for SHIB both the lowest they've been in over a month.
Anytime this ratio drops below 1, it means short positions are starting to dominate, which generally reflects a bearish mood in the market.
Also worth noting: funding rates for both coins are sliding. DOGE is sitting at 0.0005%, while SHIB is even lower at 0.0001%.
If these numbers flip into negative territory, it means short traders are paying longs, signaling that sellers are in control. This shift usually precedes more intense downside moves.
• Dogecoin Outlook: Resistance Holds, Eyes on $0.18 Support
DOGE tried to bounce but got stuffed at its previously broken trendline and it’s now trading below $0.19, having lost support from its 50-day EMA and a rising trendline that’s been intact since late June.
If this correction deepens, we’re watching $0.18 as the next major support. A clean break below that could open the door for a retest of the July 1 low around $0.15.
Technical indicators are leaning bearish: the RSI is down at 42, sliding further away from the neutral 50 mark, while MACD is still flashing a bearish crossover signaling momentum is still with the sellers.
That said, if bulls manage to step in and flip resistance into support, DOGE could push back toward the next major level near $0.24.
• Shiba Inu Update: Bears in Control as Price Slips Under EMA
SHIB isn’t faring any better. It broke below its 50-day EMA on July 29, followed by a swift 10% drop over four days. While there was a brief bounce, the move didn’t hold, and SHIB is back around $0.0000119 as of Wednesday.
If sellers stay in control, the next support to watch is $0.0000111. A breakdown from there could send SHIB toward its June 22 low of $0.0000100.
Just like DOGE, momentum indicators are showing weakness. RSI and MACD are both aligned with the bearish outlook no real signs of reversal just yet.
However, if SHIB manages to reclaim its 50-day EMA and hold it, there's a chance for a move toward $0.0000136 the next solid resistance zone on the daily chart.
In short, Both Dogecoin and Shiba Inu are showing signs of deeper correction, backed by growing short interest and weakening momentum.
Until we see a convincing recovery above key EMAs and resistance zones, the bearish setup remains intact.
Athough, I will advise one to keep an eye on those support levels and not to ignore the funding rate flips. A move can come when the market least expects it.