Shiba Inu Price Forecast: Traders Fear Bull-Trap after SHIB’s 30% Rebound

Shiba Inu Price Analysis:

Shiba Inu price has reclaimed $0.000017 level on July 9, having rebounded 30% from this the historic 100-day low recorded on Friday, with bull traders showing a lack of conviction, SHIB price looks set to experience a pull back in the days ahead.

Shiba Inu Price Hits Roadblock after 30% Rebound

Since the start of the July, the global crypto market has experience intense volatility. Due to their sensitivity to social trends, the mega memecoin sector has suffered a disproportionately high volume of sell-off in recent weeks.

Unsurprisingly, Shiba Inu has experienced significant downside, falling to a 100-day low on Friday July 5. But since the recent dovish Non-Farm Jobs (NFP) data published by the US Bureau of Labor Statistics, there has been an improvement in investor sentiment across the crypto markets.

With Shiba Inu trading at historic lows, many strategic traders capitalized on the market dip to acquire large amounts of SHIB tokens over the weekend.

Shiba Inu price fell as low as $0.000012 on Friday, its lowest in more than 100-days dating back to February 2024. But since the dovish NFP data trigger a buying frenzy across the crypto market, SHIB price recorded significant gains over the weekend.

At the time of publication on Tuesday, July 9, Shiba Inu price is trading around the $0.000017 territory, up 31.97% from the historic lows recorded on Friday.

Shiba Inu Trading Volume Dips 30% amid Price Recovery

Following momentary surge in market demand over the weekend, SHIB price looks to be losing traction this week, a move that could see bears regain foothold in the markets in the coming days.

The Coinglass chart below represents the daily aggregate value of all transactions involving a specific cryptocurrency. This provides insights into the level of market activity and investor sentiment relative to the current price trend.

According to the chart above, Shiba Inu trading volume reached $36.46 million on July 7. But while price have been on the rise since them, SHIB traders have been conducting far lesser transactions, in fears of walking into a bull trap.

The latest data shows that Shiba Inu only attracted a trading volume of $26.3 million on July 8. This $10 million decline in Shiba Inu trading volume accounts for approximately 27% drop-off in trading activity between July 7 and July 9.

When an assets trading volume begins to drop during a price recovery phase, it can be interpreted as a bearish signal for a number of reasons.

When an asset’s trading volume begins to drop during a price recovery phase, it can be interpreted as a bearish signal for a number of reasons.

Firstly, declining volume suggests that fewer traders are participating in the market, which can indicate a lack of confidence in the sustainability of the price rise. This reduced participation often leads to weaker buying pressure, making it easier for the price to reverse and fall.

Secondly, a drop in trading volume during a price increase may signal that the recovery is being driven by a smaller group of buyers, rather than broad market support.

This scenario raises the risk of a bull trap, where the Shiba Inu price briefly rises but lacks the necessary momentum to maintain the uptrend, eventually leading to a sharp decline.

SHIB Price Forecast: $0.000015 Reversal on the Cards

Shiba Inu price has reclaimed $0.000017 at the time of writing on July 9, having rebounded 30% from the historic lows recorded last Friday. However, SHIB traders’ hesitation, as reflected by the 28% drop-off in trading volume, underscores the cautious sentiment and potential for another bearish reversal toward the $0.000015 level in the days ahead.

More so, technical indicators on the Shiba Inu daily timeframe price chart below also supports this bearish price forecast.

The Bollinger Bands (BB) show that the price is still trading below the middle band ($0.000016887), suggesting that downward pressure remains. Additionally, the recent price action has struggled to break through the 23.6% Fibonacci retracement level at $0.000018748, indicating a significant resistance point.

Key support levels to monitor are at $0.000015026 and $0.000014000. A break below these support levels could signal further declines, possibly retesting the historic lows.

On the upside, overcoming the $0.000016887 middle Bollinger Band and breaking above the $0.000018748 resistance would be essential to invalidate the bearish outlook and signal potential recovery.