- Shiba Inu price breakdown below $0.00001 triggers massive withdrawals from trading platforms.
- SHIB’s futures recorded a sharp decline in open interest, reflecting reduced speculative forces from the derivative market.
- SHIB prices ride a mid-term sideways trend resonating within the formation of a descending triangle pattern.
Shiba Inu, the popular dog-themed meme cryptocurrency, plunged another 4.28% during Wednesday’s U.S. market hours. The selling pressure came as a renewed bearish momentum in the crypto market after a relief rally weakened, projecting a risk of continued correction in these assets. As the futures contract tied to SHIB witnessed a notable decline, the coin price teetered at the psychological level of $0.00001. Is a major breakdown looming?
Volatility Wipes Out SHIB Leverage While Exchange Outflows Signal Accumulation
Since last month, the Shiba Inu price has experienced a notable correction from $0.00001484 to the current trading price of $0.00001018, accounting for a 31% loss. Subsequently, the asset market cap also plunged to $6.8 billion. Amid this pullback, the coin price witnessed a massive sell-off on October 10, which temporarily pushed the asset’s value to $0.00000678 before reclaiming its position above the psychological level of $0.00001.
The drastic increase in market volatility sparked massive liquidations of Shiba Inu (SHIB) futures contracts, wiping out millions in leveraged positions and driving open interest to a sharp decline.
According to Coinglass data, SHIB’s total futures open interest has dropped from $206 million to $103 million within the past two weeks – a whopping 50% decrease.
This dramatic decline suggests that speculation surrounding SHIB has cooled down significantly, with traders adjusting leveraged positions and cutting high-risk positions. The contraction in open interest is quite frequently a reset of market leverage, which could dampen short-term volatility and prepare the price base for a more stable level if spot demand is regained.
Despite the fact that market FUD was everywhere, Shiba Inu (SHIB) had a series of stark negative spikes in its exchange net flow as prices flirted with a breakdown below the psychological critical point of $0.00001.
According to the data provided by CryptoQuant, on October 10, the biggest liquidation event in the history of cryptocurrencies, the exchange net flow of SHIB dropped to -903,075,035 tokens, which indicates that a large number of withdrawals from trading platforms occurred. The trend continued deeper the next day, with net flows declining to -1,037,500,588, followed by another -721,919,646 on Sunday.
These successive negative readings indicate that investors were increasing their withdrawals of SHIB from exchanges in an accelerated manner, indicating a possible transition to accumulation behavior or decreased sell-side pressure despite increasing market uncertainty.
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Shiba Inu Price Holds Major Support at Triangle Pattern
The daily chart analysis shows the Shiba Inu price correction currently seeks support at the bottom trendline of a descending triangle pattern. Since August 2024, the coin has witnessed dynamic support from the lower trendline, acting as a major accumulation zone for buyers to recuperate the bullish momentum.
However, the chart setup also offers a declining trendline from the upside, acting as a dynamic resistance to restrict buyers’ motive for higher levels. As a result, the Shiba Inu price continues to resonate within two converging levels, indicating an imminent breakout move is looming in the near future.
A bearish breakdown below the bottom trendline and $0.00001 psychological support would accelerate the selling pressure and bolster a fall towards the next significant support at $0.00000844.
On the contrary, if consolidation manages to build sufficient bullish momentum, a potential breakout from the overhead resistance would signal a bullish shift in SHIB’s dynamics.
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