Shiba Inu Price Hangs in the Balance as Open Interest Dives

Shiba Inu price has crashed to a crucial support level. It could be at risk of further downside as activity in the futures market wanes. SHIB token was trading at $0.000090, slightly above the key support of $0.0000085, a level it has failed to move below.

Shiba Inu Price Sits at a Crucial Support Level

The daily timeframe chart shows that SHIB price has been under pressure this year. It has crashed from the November high of $0.0000334 to a low of $0.0000085.

The coin has moved below the important level at $0.00001020, its lowest level in April and June this year. This price was along the lower side of the descending triangle pattern, a common bearish continuation sign in technical analysis.

Shiba Inu price has dropped below the 50-day and 200-day Exponential Moving Averages, a sign that the downtrend is gaining momentum. It also remains below the Ichimoku cloud and the Supertrend indicators.

Most importantly, the coin is hovering slightly above the important support level at $0.0000085. It is the level SHIB failed to move below on October 10, November 4, and November 16 this year.

Remaining above that level is a sign that bears are afraid of placing positions below the price. Therefore, this price action suggests that it may rebound and potentially move above the key resistance level at $0.00001020.

On the other hand, a drop below that support level will indicate further downside, as it will confirm the bearish outlook. In this case, the SHIB price may continue to fall to the key support level at $0.000058.

This target price is estimated by first measuring the distance between the widest part of the descending triangle and then measuring the same from its lower side.

SHIB Open Interest Has Crashed This Month

One of the main bearish catalysts for the Shiba Inu price is that there are signs its demand in the spot and futures market has declined this month. Data compiled by CoinGlass shows that the open interest has dropped to just $72 million, with the majority of it concentrated on exchanges such as OKX, Bitget, and BingX.

The open interest has been in a strong downward trend after peaking at the year-to-date high of $330. That happened in July this year.

Futures open interest is an important number in the crypto industry because it looks at the volume of outstanding puts and call options in the futures market. A higher number typically indicates greater liquidity and increased demand from traders using leverage.

Another metric in the futures market is the funding rate. It is a figure that looks at the fees paid by bulls and bears to ensure that the futures price does not deviate significantly from the spot price.

In this case, the funding rate has remained relatively stable in a horizontal line over the past few months. It is a sign that the liquidity has waned.

Like other cryptocurrencies, the performance in the futures market is largely driven by what happened on October 11, when liquidations surged to over $20 billion. Over 1.6 million traders were wiped out in a single day. Shiba Inu’s liquidations jumped to over $6.1 million on that day.

Another sign of a lack of demand is the ongoing performance in the spot market. There, the daily volume has dropped to $134 million from the year-to-date high of over $1.5 billion.

Summary

Shiba Inu price has been in a strong downward trend this year, a move that has cost investors billions of dollars. The initial phase of the decline occurred as crypto traders shifted to newer Solana meme coins, such as Official Trump, Fartcoin, and Dogwifhat.

The ongoing crash has mirrored what is happening among other meme coins, such as Pepe, and altcoins like Avalanche. Therefore, the token price could continue to fall as the futures open interest and funding rate decline.