Key takeaways
- Shiba Inu (SHIB) is trading above $0.0000042 after breaking above a major downtrend line.
- Five consecutive days of exchange outflows suggest that investors are moving SHIB into private wallets, reducing selling pressure.
- Derivatives data remains bullish, with positive funding rates and long-to-short ratios favoring buyers.
Shiba Inu (SHIB) continued its rebound on Tuesday, trading above $0.0000042 after breaking above the long-term downtrend line. Improving on-chain activity and strengthening derivatives data indicate that bullish momentum is building, which could pave the way for further upside.
Exchange flows indicate reduced selling pressure
On-chain data from CryptoQuant suggests that investors have been steadily moving SHIB off central exchanges, a trend often seen as a positive signal for prices.
The platform’s net exchange inflow data recorded five consecutive days of net outflows starting July 17, showing that more SHIB tokens are leaving exchanges than deposited.
This pattern usually indicates that investors are transferring tokens into private wallets for long-term holding rather than preparing to sell, reducing immediate selling pressure in the market.
A continued decline in exchange balances could support SHIB’s continued recovery if purchase demand remains stable.
The market situation in the derivatives sector also indicates improved confidence among traders.
according to Queen GlassSHIB’s ratio of longs to shorts was 1.02 on Tuesday, indicating a slight preference for longs over shorts and reflecting growing optimism that prices may continue to move higher.
Sentiments are further supported by funding rates. SHIB’s perpetual futures funding rate turned positive on July 17 and remained in the bullish zone at 0.0103% on Tuesday.
Positive funding rates indicate that traders holding long positions are paying traders holding short positions, an indication that bullish bets currently outweigh bearish bets.
The combination of positive funding rates and a favorable long-to-short ratio indicates that traders are increasingly looking to make additional gains.
Shiba Inu Price Forecast: Bulls target higher resistance
From a technical perspective, SHIB has improved its near-term outlook after breaking above the downtrend line that has limited price action since mid-May.
The breakout puts the meme coin in a stronger position to extend its recovery if the buying momentum continues.
The next major resistance is located around $0.0000045. A decisive close above this level could pave the way for a move towards the 50-day Exponential Moving Average (EMA), which is also located near $0.0000045.
Momentum indicators have also become more positive. The Relative Strength Index (RSI) has risen to the 54 level and is moving towards the 60 level, indicating that the downward momentum is fading.
Meanwhile, the Moving Average Convergence Divergence (MACD) produced a bullish crossover, with expanding green chart bars reinforcing the improved technical outlook.
However, if the current recovery loses momentum and sellers regain control, SHIB could pull back towards a yearly low near $0.0000040, as buyers may attempt to defend the broader uptrend.
