Shiba Inu Eyes Key Turning Point Amid Rebound Signs

Shiba Inu is facing an intense ecosystem drawdown in line with the general market, but there are signs of a rebound ahead

As Shiba Inu (SHIB) inches closer to a critical threshold, all eyes are on the meme-based cryptocurrency. The token is currently trading at $0.000021, down by 0.89%, and many analysts believe it is nearing an oversold condition. This balance could either lead to a recovery or cause the asset’s decline to worsen.

Bollinger Bands: The Key Indicator of Volatility

The drama surrounding SHIB’s price movement revolves around Bollinger Bands. This technical analysis tool is renowned for highlighting volatility and market trends. These bands have three lines: a middle line that shows the 20-day average. 

The upper and lower lines are placed two standard deviations from the middle. SHIB’s current TradingView chart shows the token is approaching the lower Bollinger Band. It is sitting about 3% below its current price.

Typically, touching or breaching this lower threshold signals an asset might be oversold, indicating the possibility of a price correction. The dog-themed token’s downward slide may have resulted from intensified selling pressure, potentially pushing its price to unsustainable lows.

Oversold or Opportunity?

An oversold condition is not just a red flag; it can also carry the potential for bullish reversals. Historically, these conditions often lead to a recovery if enough buying interest comes in to overcome the negative sentiment in the market.

For SHIB, the lower Bollinger Band serves as a pivotal point. If SHIB stabilizes near its lower Bollinger Band, the next challenge will be breaking through the $0.0000223 resistance level. 

This would align with the 20-day moving average. Achieving this could ignite renewed bullish momentum, pushing the price toward the upper band at $0.0000246. However, the reverse scenario remains plausible. 

Failure to maintain support near the lower band could deepen SHIB’s slump, amplifying bearish sentiment. If there is insufficient buying interest, SHIB value could drop even more. Traders are advised to be careful, as the market could change unexpectedly.

Notably, the upcoming TREAT token could boost Shiba Inu by attracting attention to its ecosystem and increasing demand for SHIB. 

Nevertheless, many analysts believe an altcoin rally is coming this year, and Shiba Inu is expected to benefit from this potential rise. For now, all eyes remain on SHIB’s trading volume and ability to hold key support levels.

Disclaimer: The information provided in this article is for informational purposes only. It does not constitute investment, financial, trading, or any other sort of advice. You should not treat any of BGECrypto’s content as such. BGEcrypto does not recommend that any cryptocurrency should be bought, sold, or held by you. Do your due diligence and consult your financial advisor before making any investment decisions.