Shiba Inu (SHIB) Wakes Up With 17% Bounce After a 30% Monthly Decline

Shiba Inu has finally recovered from a severe correction that wiped out about 30% of its market value over the course of a month. After months of consistent selling pressure, SHIB has reported a strong 17% recovery from recent lows, which may indicate to traders that sellers may have reached short-term exhaustion. 

Long-term picture remains bearish

The asset suffered structural damage as a result of the decline. Over the course of the previous month, SHIB continuously formed lower highs and lower lows while trading below its major moving averages, confirming a persistently bearish trend. 

Downward momentum was further accelerated by the breakdown from consolidation zones, which led to more liquidations and the forced exit of many short-term holders. The market became extremely defensive as a result, with traders generally anticipating more drops.

The most recent action, though, raises the possibility of a change in the short-term dynamics. Price action indicates that SHIB is bouncing strongly following several tests of the $0.000006 support region. Increased trading volume during the recovery suggests that traders are once again participating, most likely as a result of short-position covering and dip buyers. 

The current zone becomes strategically significant for whales and larger holders. Possibilities for accumulation usually arise following a 30% correction, particularly if overall market conditions level off.

Are SHIB whales ready?

Before making bigger entries, whales frequently watch for indications of seller exhaustion, volume expansion on rebounds, and stabilization above psychological support levels. Perhaps the most recent rebound is the first sign that such a phase is about to start.   

Since SHIB is still trading below significant trend averages, the overall market structure has not completely turned bullish. Recovery rallies inside downtrends are prone to failure if follow-through purchases do not occur.

Regaining adjacent resistance zones and maintaining gains without an abrupt retracement presents SHIB with its next challenge. In the event that buyers are able to hold the current support and gradually raise the price, confidence may gradually return, allowing liquidity to return to the asset. If momentum is lost, on the other hand, another test of lows could occur.