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Following a nearly 12-fold increase in trading volume, Shiba Inu ($SHIB) saw one of its strongest single-day movements in months, moving the meme coin sharply higher from its extended consolidation range. But the first indications of fatigue are already manifesting.
$SHIB's momentum disappears swiftly
After the initial breakout, buyers appear to be losing momentum, according to the most recent daily candle, indicating that the market is about to enter a critical phase where profit-taking may momentarily outweigh new demand. The chart clearly shows the driving force behind the change. Over the past few months, the volume increased dramatically, surpassing all previous sessions.
These spikes frequently coincide with the start of a long-term trend reversal or the peak of a brief breakout. Since $SHIB has already rejected intraday highs, traders should keep a close eye on whether buyers are able to hold onto recently recovered support levels. The 100-day exponential moving average is located at $0.00000500, which is the first level worth keeping an eye on.
After spending months below this resistance, $SHIB has already broken above it, making it the most significant short-term support. The breakout is still technically intact despite today's decline if buyers are able to maintain the price above this level. The declining 200-day EMA presently serves as the main macro resistance at the second key level, which is situated close to $0.00000600.
Rapid shift in sentiment
Every significant recovery during the wider decline has ultimately fallen short of this moving average. In addition to encouraging more momentum traders to enter the market, a decisive daily close above it would represent the first significant structural bullish shift since the start of the year.
Lastly, if $SHIB drops below $0.00000445, the area where the shorter-term moving averages that supported the price prior to the breakout are located, downside risk rises significantly. Losing this zone would essentially eliminate the majority of the most recent technical improvement and increase the likelihood that short position liquidation, rather than sustained spot demand, was the primary driver of the most recent rally.
The situation is becoming more precarious, as indicated by momentum indicators. For the first time in months, $SHIB is now in overbought territory as the RSI has surged above 70. Overbought conditions often accompany cooling periods following explosive advances, especially when accompanied by exceptional volume spikes, even though they do not guarantee an immediate reversal on their own. Technically speaking, $SHIB is still stronger than it was a few days ago, but the easy portion of the rally has probably passed.
The way the price moves around the $0.00000500 support and whether bulls eventually gather enough strength to challenge the 200-day EMA near $0.00000600 will determine whether this breakout develops into a wider trend reversal or fades into another unsuccessful recovery.