42% Shiba Inu (SHIB) On-Chain Increase Is Not Yet Bullish: Explaining Why
TL;DR
Shiba Inu's on-chain activity has increased by 42%, indicating potential demand growth. However, current price trends suggest it's too early to label this as a bullish signal.
Key points
- Shiba Inu's on-chain activity increased by 42%
- Initial growth suggests potential demand for SHIB
- Price trends do not yet confirm a bullish market
Shiba Inu's on-chain activity has significantly improved, with a key metric rising by about 42%. That kind of growth might initially point to a resurgence of SHIB demand. However, the price chart demonstrates why it would be premature to call it a bullish confirmation.
Will SHIB on-chain activity help?
The main indicator that more transactions or interactions are taking place is an increase in on-chain activity. Whether those transactions reflect buying, selling, wallet transfers, or other activity is not disclosed. Rising activity requires confirmation from price, volume, and market structure for the signal to become convincingly bullish.
SHIB/USDT Chart by TradingView
At the moment, SHIB is trading around $0.00000521. The token has made significant progress since its July low of about $0.0000041, but the recovery has repeatedly stalled before a true long-term trend reversal could develop.
Key barrier for SHIB
The most noticeable barrier is located between $0.0000056 and $0.0000057, where the long-term moving average is still descending. During its late-August spike, SHIB momentarily broke above this area, hitting about $0.0000062, but buyers were unable to sustain the breakout. The price swiftly fell back beneath resistance.
Shorter-term conditions are better. An immediate support area is created by SHIB's current position above a cluster of moving averages around $0.0000050–$0.0000051. Maintaining that cluster allows for another attempt at recovery. However, losing $0.0000050 would weaken the setup and might expose roughly $0.0000047–$0.0000045.
Additionally, momentum offers little assurance. Instead of displaying consistent bullish strength, the daily RSI is sitting in the neutral 50 region. Trading volume has also declined significantly from the spikes that accompanied the rallies in July and August.
For this reason, it is not appropriate to interpret the 42% on-chain increase as a stand-alone bullish signal. Network activity may rise prior to price changes, but it may also rise in the absence of significant buying pressure.
Q&A
What does a 42% increase in Shiba Inu's on-chain activity mean?
A 42% increase in Shiba Inu's on-chain activity indicates a rise in transactions or interactions, suggesting potential demand growth.
Why is the current price trend of Shiba Inu not bullish despite increased activity?
The current price trend is not bullish because it lacks confirmation from price, volume, and market structure, despite the rise in on-chain activity.
What factors are needed to confirm a bullish trend for Shiba Inu?
To confirm a bullish trend for Shiba Inu, there needs to be alignment between rising on-chain activity, price movements, trading volume, and overall market structure.
