Shiba Inu trades near yearly lows at $0.0000042, on chain data shows sellers weakening

Shiba Inu’s price has been caught in an extended downtrend and is now approaching one of its weakest technical outlooks this year. With the asset trading around $0.0000042, it is hovering close to its local bottom. Despite the ongoing decline, both price action and on chain data suggest that the strength of selling pressure may be gradually fading.

Technical indicators remain weak

Currently, SHIB is trading below its 50 day, 100 day, and 200 day exponential moving averages, underscoring the coin’s lackluster technical setup. The downward slope across all these averages highlights persisting weakness on the charts. An attempted rebound was quickly reversed after a brief uptrend, showing that recent recovery efforts have not been successful.

However, the latest pullback has distinct characteristics. Trading volume has been steadily decreasing alongside the falling price. Unlike the capitulation often seen at the end of strong bear markets, SHIB has shown a pattern where market activity is generally cooling off. This dynamic implies that while there are still sellers, the downward momentum is less intense compared to earlier phases.

On chain data shows no signs of panic selling

On chain metrics paint a similar picture. Net flows remain negative, meaning that more SHIB tokens are leaving exchanges than entering them. Exchange reserves are stable at roughly 80 trillion SHIB, which suggests investors are not rushing to deposit tokens for immediate sale. As an Ethereum based meme coin with a large following, Shiba Inu’s trends attract close scrutiny.

Notably, there has been no sharp deterioration in the number of active addresses or daily transactions. These patterns point to a gradual weakening of market participation, rather than a sudden rush for the exits. While sell side activity persists, buyer interest at these low price points also remains modest.

Mini glossary: Net flow measures the difference between the amount of an asset entering and leaving exchanges. A negative net flow means more tokens are leaving exchanges, which may suggest there is less intent to sell in the short term.

RSI nears oversold territory

The relative strength index (RSI) for SHIB is approaching levels often associated with local lows. Although entering oversold conditions does not guarantee an immediate reversal, technical analysts consider it a sign that further downside could be limited unless a new catalyst emerges.

As such, current conditions do not suggest a strong recovery is imminent. However, after months of persistent declines, the reduction in the number of sellers may mean the risk reward balance is beginning to shift, making further sharp drops less likely in the short term.

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