Shiba Inu (SHIB) is being analyzed for potential technical breakdown, as signs of a death cross formation emerge. This condition is linked to increasing market instability.
What Is the Death Cross—and Why It Matters
In technical analysis, a death cross occurs when the 50-day moving average crosses below the 200-day moving average. It signals that short-term bullish momentum has been overtaken by long-term bearish sentiment. In SHIB’s case, recent price action has pulled these lines dangerously close to one another, fueling speculation of an imminent breakdown.
If this crossover materializes, it could trigger a chain reaction—activating algorithmic sell orders and stop-loss mechanisms from retail traders. In the short term, this could intensify selling pressure, potentially dragging SHIB back to its previous lows.
On-Chain Data Confirms Investor Strain
On-chain metrics further validate the bearish sentiment. Recent data indicates that over 67% of SHIB holders are currently underwater, emphasizing how susceptible the market is to panic-driven exits, especially in volatile times.
Additionally, large transaction volumes have significantly dropped, decreasing from the recent $105.5 million range to notably lower levels. This suggests that whale accounts are scaling back their exposure. Other indicators, such as declining network growth and transaction counts, further underline the loss of momentum, presenting a grim short-term outlook.
Fading Social Engagement Is Fueling the Slide
As a memecoin, Shiba Inu heavily relies on community enthusiasm. However, recent trends show that engagement is fading. The number of users in SHIB-focused Telegram groups has declined by 0.39% over the past week, and mentions across social platforms are decreasing along with user interaction.
When the narrative surrounding a memecoin weakens, maintaining price support becomes challenging. Without a compelling community push or strong buy-side interest, the likelihood of revisiting previous lows increases.
Currently, SHIB's price action appears vulnerable without a clear support base. While a short-term relief rally is possible, analysts warn that such a movement could be a 'dead cat bounce' unless supported by improved fundamentals and renewed investor interest.
