- SHIB’s price has risen by almost 10% in the last week.
- However, the rally may be shortlived, as bearish momentum remains significant.
Leading meme coin Shiba Inu [SHIB] may shed its current gains as key indicators hint at the possibility of a price decline in the short term.
According to CoinMarketCap’s data, the altcoin’s value has grown by almost 10% in the last week to exchange hands at $0.00002298 at the time of writing.
However, an assessment of the coin’s price movements on a daily chart revealed the rally had not been backed by any actual demand for the meme coin.
It has only mirrored the growth recorded in the general cryptocurrency market in the last seven days.
SHIB has a rough patch ahead of it
While SHIB’s price climbed last week, its Chaikin Money Flow (CMF) trended downward, forming a bearish divergence. This indicator measures the flow of money into and out of an asset.
A negative divergence between an asset’s price and its CMF often signals a potential reversal in the price trend. It suggests that the buying momentum may be weakening despite the rising price, and market participants often interpret it as a sign of an upcoming price decline.
At press time, SHIB’s CMF was -0.03.
Regarding the demand for the meme coin, the values of SHIB’s key momentum indicators as of this writing confirmed the decline in buying pressure.
For example, its Relative Strength Index (RSI) was 41.80, while its Money Flow Index (MFI) was 22.64.
The values of these indicators showed that SHIB traders favored sell-offs over accumulation. Therefore, last week’s price rally may be unsustainable, as the coin market has not seen any notable inflow of new liquidity.
Further, its Elder-Ray Index returned a negative value at press time. This indicator measures the relationship between the strength of the altcoin’s buyers and sellers in the market.
When it is negative, bear power is dominant in the market.
As of this writing, SHIB’s Elder-Ray Index was -0.0000019.
Source: TRB/USDT on TradingView
In SHIB’s derivatives market, it has witnessed a decline in its futures open interest since the beginning of April, according to Coinglass’ data. At $57 million at press time, it has since fallen by 47%.
Read Shiba Inu’s [SHIB] Price Prediction 2023-24
When an asset’s Futures Open Interest plummets in this manner, market participants have continued to exit their positions without opening new ones.
This is often due to low confidence in the possibility of a significant price hike in the short term.