Warnings Sounded: Shiba Inu Cryptocurrency's Price May Drop Due to Falls in Weighted Funding Rate
Shiba Inu (SHIB) Faces Bearish Outlook Amidst Market Downturn
Shiba Inu (SHIB), the popular meme cryptocurrency, is currently experiencing a bearish trend, with several indicators pointing towards further potential downside.
The Relative Strength Index (RSI) for SHIB has dipped below the neutral point at 50, a sign of over-sold conditions. This is accompanied by a head-and-shoulders pattern that has formed on the daily timeframe chart, a popular bearish reversal pattern. A drop below the neckline level at $0.00001027 will further confirm this bearish outlook.
The right and left shoulders of the head-and-shoulders pattern are at $0.00015, and the neckline is at the current level. It's important to note that the Moving Average Convergence Divergence (MACD) for SHIB is currently at zero, another bearish signal.
The current downturn in the crypto market, including SHIB, is primarily driven by a combination of factors. A major market-wide flash crash in August 2025, triggered by a single Bitcoin whale dumping $2.7 billion, caused a sharp panic sell-off across major cryptocurrencies, including SHIB.
Economic factors such as persistent global inflation, geopolitical tension, and central banks holding or raising interest rates have also contributed to the uncertainty and tightening of liquidity, causing capital to exit riskier assets like crypto in favor of safer ones. Leverage and panic selling have exacerbated the downturn as traders on margin are forced to liquidate positions, causing cascades of price declines.
Regulatory uncertainties, such as threats or actions on stablecoins, lawsuits, or bans, further dampen investor sentiment and prompt withdrawals or selling pressure. As a meme coin and altcoin, SHIB tends to be more volatile and sensitive to market-wide sentiment swings and liquidity shocks.
Despite the downturn, some analyses highlight potential buying opportunities for leading cryptos like Bitcoin and Solana post-crash due to shifting fundamentals and institutional interest. However, meme coins like SHIB remain more speculative.
Currently, whale holdings have been stagnant this month at 45 billion, and the daily volume of SHIB has dropped to $204 million, lower than other tokens like Pepe, Dogwifhat, and Floki. The token is predicted to have a bearish breakout, with the initial target being the neckline at $0.00001027.
In summary, the crypto market downturn in August 2025 results from a convergence of a huge Bitcoin sell-off, macroeconomic headwinds, leveraged liquidation cascades, and regulatory concerns—all impacting major and minor cryptos including Shiba Inu.
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