The Shiba Inu futures market has experienced a notable decline in activity recently. The open interest in SHIB futures, currently at its lowest since February 14, reflects this trend. SHIB is trading at $0.000014, mirroring its price level from March 1. This downturn is largely attributed to the memecoin‘s sliding value.
Why is SHIB Declining?
According to Coinglass data, SHIB’s futures open interest stands at $26 million, having decreased steadily since July 19, amounting to a 51% drop in the past 16 days. Open interest represents the total number of futures contracts not yet settled. A decrease in this metric typically signals reduced market activity and waning investor confidence in the asset’s future price.
Despite these indicators, SHIB’s predominantly positive funding rate on various cryptocurrency exchanges suggests a different narrative for the memecoin. Since its year-to-date peak of $0.000035 on March 6, SHIB’s price has been on a downward trajectory. However, the weighted funding rate has remained largely positive, indicating continued demand for long positions among futures traders.
Is SHIB on the Verge of Recovery?
The Relative Strength Index (RSI) for SHIB’s daily chart shows a potential for price recovery, with the RSI at 29.03. RSI evaluates market conditions as overbought or oversold; a value of 29.03 suggests that SHIB might be oversold and poised for an upward correction.
Nevertheless, other indicators paint a less optimistic picture. The Chaikin Money Flow (CMF) for SHIB has been decreasing alongside its price. Currently, the CMF value is below zero at -0.15, indicating a bearish trend. A negative CMF suggests that more money is exiting the asset than entering it, further emphasizing the selling pressure.
Key Takeaways for Investors
– Monitor SHIB’s RSI for potential signs of price recovery.
– Keep an eye on the CMF value for indications of market sentiment.
– Be cautious of SHIB’s predominantly positive funding rate, which might not fully reflect the underlying market sentiments.
– Track SHIB’s open interest in futures to gauge market activity.
If the current trend persists, SHIB’s price could drop to $0.000012, a level last seen on July 5. Conversely, if liquidity starts flowing back into SHIB, an uptrend could push the price to $0.000020.