Shiba Inu (SHIB) Key Metric Loses 48%: Is Bullish Reversal Over?

Shiba Inu is finding it difficult to sustain its most recent rebound as a key exchange metric declines precipitously. One of the signals that had previously supported the bullish reversal has been weakened by SHIB’s seven-day moving average of mean exchange outflows, which has decreased by approximately 42% to 48%, depending on the observation point.

Shiba Inu’s sharp decline

In general, exchange outflows track tokens as they depart from centralized trading platforms. High outflows over time may be a sign that holders are transferring SHIB into private wallets instead of keeping it on the market right away. A sharp decline does not automatically mean investors are selling, but it shows that this source of potential supply reduction has lost considerable momentum. 

The exchange data in general is still conflicting. While the mean inflow increased by 0.79 percent, SHIB’s overall exchange inflow increased by 0.56 percent. Simultaneously, the total outflows increased by 0.59 percent. Most significantly, at about -62.5 billion SHIB, the total exchange netflow is still extremely negative. 

Therefore, the outflow decline alone does not confirm that holders have suddenly started depositing large amounts of SHIB onto exchanges. Rather, the data indicates that withdrawals have become less intense. The price of SHIB is up against yet another significant obstacle, and the price action increases the importance of the situation.

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After an explosive recovery from roughly $0.0000042, SHIB is currently trading around $0.00000535. The token briefly surpassed $0.0000060 during the rally before sellers swiftly pushed it back. The long-term moving average is located at $0.00000573, which is the biggest immediate technical barrier. 

Bullish reversal ends

This area has already been tested by SHIB, but it was unable to establish itself above it. Positively, the token is still well above the shorter moving averages, which are grouped around $0.00000466 and $0.00000496. After becoming overbought during the initial rally, the RSI has also cooled to about 60, lessening some of the short-term overheating. 

Therefore, it would be premature to declare the bullish reversal over. Although SHIB’s improved technical structure has not yet been destroyed, it has lost momentum. The recovery case would be significantly strengthened and $0.0000060–$0.0000063 would come back into focus with a decisive move above $0.00000573. 

Conversely, losing the $0.0000049–$0.0000050 area would indicate that the breakout is failing and expose SHIB to another test of the lower support zone.