Shiba Inu (SHIB) Up 24%, But Profit-Taking Signal Could Signal Pullback

Top Meme token Shiba Inu has seen an impressive increase in the recent meme token price surge, rising 24% over the past week. At the time of writing, the token is trading at $0.000015, up an additional 4% today.

However, recent activity suggests this upward momentum may be slowing down. Profit-taking has begun, and technical indicators show signs of weakening demand for this altcoin.

SHIB Faces Increasing Downward Price Pressure

One of SHIB's primary market momentum indicators, BBTrend (Bollinger Band Trend), has begun to show a decline.

The indicator's chart bars have gradually reduced in size over the past few days, signaling a steady decrease in buying pressure in the meme token market.

BBTrend indicates when an asset is experiencing excessive movement up or down. As the size of green bars decreases, buying momentum is weakening.

This could reduce SHIB's upward price movement. If this trend continues, the meme token risks correction or consolidation in the short term.

Moreover, there has been a significant increase in demand for short positions on SHIB since 05/06. According to Coinglass, the token's Long/Short ratio has returned below one since then, indicating growing preference for short bets. At the time of writing, this ratio is 0.98.

When traders increase their focus on short selling like this, it suggests a lack of confidence in the token's ability to maintain its upward trend. The increase in short positions indicates that investors are preparing for a potential decline, confirming the possibility of price reduction in the near future.

SHIB Likely to Experience Correction

The token's declining Chaikin Money Flow (CMF) index emphasizes the decreasing buying pressure among SHIB traders. This momentum indicator is trending downward and attempting to break below the zero line.

A break below the zero line would confirm a negative change in market trend. This could cause SHIB to erase some of its recent gains and drop to $0.000010.

On the other hand, if SHIB maintains its upward trend, it could trade at the higher level of $0.000019 for several months.