Shiba Inu Faces Renewed Bearish Signal as 'Death Cross' Reappears

The popular meme coin Shiba Inu (SHIB) has once again entered a period of technical uncertainty, with a "death cross" appearing on its short-term price chart. This technical indicator, which is a key signal for many traders, has reappeared, raising questions about the future trajectory of the token's price. A death cross typically occurs when a short-term moving average crosses below a long-term moving average, a sign that can indicate a potential long-term downtrend.

Technical Indicators Signal Caution

According to market data, a death cross was formed on a key price chart for SHIB, suggesting that downward momentum may be gaining strength. This development follows a period where the coin struggled to break through key resistance levels, indicating a significant supply overhang from sellers. While the "death cross" often signals bearish sentiment, market analysts note that it is not a guarantee of a prolonged crash and is more a cautionary sign of a slowing recovery.

The Role of Community and Trading Volume

Despite the bearish signal, the Shiba Inu community's behavior provides a potential "catch." Even with the price decline, trading volume for SHIB has shown an increase, suggesting that investors are not panicking and remain actively engaged. This sustained volume could be a catalyst for a possible reversal, as strong buying pressure could negate the technical indicator's bearish implications. However, a recent sharp drop in the ecosystem's burn rate has raised concerns about the token's deflationary mechanism, which could increase selling pressure if not addressed by the community.