The bearish divergence seen in the Shiba Inu Relative Strength Index (RSI) is causing some concerns amid the first recovery rally in the last 80 days. A close inspection of the chart reveals a story that every SHIB investor should pay attention to.
At the heart of the matter is the notorious bearish divergence in the RSI, a momentum oscillator that measures the speed and magnitude of price movements. Typically, the RSI operates within a scale of 0 to 100, where values above 70 indicate an overbought condition and values below 30 indicate an oversold condition. A bearish divergence occurs when the price makes higher highs, while the RSI makes lower highs. This inconsistency often precedes a possible price reversal.
By evaluating the SHIB chart, we can identify a clear bullish trend in price, with SHIB reaching new highs. In contrast, the RSI fails to reflect this bullish movement and instead shows a series of downward peaks. This divergence is a red flag, warning that bullish momentum could be losing steam and a price reversal could be on the horizon.
What is even more worrying for SHIB holders is the broader context. The last 80 days have been particularly challenging for SHIB. Prices remained stagnant and the token struggled to gain traction. The recent bullish trend marked one of the first significant instances of price growth in almost three months. A reversal now would be a devastating blow to community morale, leaving Shiba Inu in a precarious position.
While Shiba Inu’s recent price movement provided a ray of hope to its dedicated community, the bearish divergence on the RSI indicates potential stormy waters ahead. Investors and traders should be prepared for a possible correction.
