The cryptocurrency market has been bullish so far this week, with major cryptocurrencies like Bitcoin and Ether now trading new key resistance levels.

Shiba Inu (SHIB), one of the leading memecoins in the market, is also approaching a key resistance level.

It is currently trading above $0.0000060 at press time on Thursday and could rally higher in the near term. 

However, on-chain data metrics suggest a bearish outlook, as a surge in dormant wallet activity alongside spikes in the Network Realized Profit/Loss (NPL) indicator and trading volume.

Traders are now approaching the market cautiously as downside risks appear to outweigh short-term recovery.

SHIB is up 4% and is now trading at $0.00000611. However, Santiment data indicates that SHIB could encounter selling pressure in the near term. 

Santiment’s Network Realized Profit/Loss (NPL) indicator computes a daily network-level Return On Investment (ROI) based on the coin’s on-chain transaction volume, which measures market pain. 

The metric recorded a massive dip on Tuesday, indicating that holders were realizing losses. 

Furthermore, Santiment’s Age Consumed index and transaction volume showed an upward surge, suggesting dormant tokens (tokens stored in wallets for a long time) are in motion.

Usually, a surge in dormant wallet activity and transaction volume, combined with a negative spike in the NPL indicator, triggers a brief price rally, followed by massive sell-offs (bull traps).

This pattern was observed in early December when SHIB’s price rose slightly first, followed by a sharp price correction. 

Furthermore, CryptoQuant's summary data also suggests that SHIB could undergo a bearish period in the near term. 

The data reveals that the presence of large orders in the futures markets hints at some optimism.

Despite that, the heating conditions and the sell-side dominance suggest a potential downside push. 

Similar to other major cryptocurrencies, the SHIB/USD 4-hour chart remains bearish and efficient.

SHIB has been consolidating between $0.00000561 and $0.00000626 since March 19.

It has currently surpassed the 50-day EMA at $0.0000060 but could encounter further selling pressure in the near term. 

The breakout or breakdown will dictate SHIB’s next directional move; however, traders should be cautious, as the primary trend for the meme coin remains bearish, and any short-term recovery could face corrections.

The momentum indicators are also moving sideways as the market lacks direction.

The Relative Strength Index (RSI) on the 4-hour chart reads 63, above the neutral level of 50, indicating fading bearish momentum. 

The Moving Average Convergence Divergence (MACD) lines coil against each other, suggesting indecision among the traders.

If the rally persists, SHIB could retest the 100-day EMA near $0.0000065. A daily candle close above the 100-day EMA could extend recovery toward the weekly resistance at $0.0000068.

However, if the bull trap holds, the immediate support lies around the lower consolidation boundary at $0.0000056.

A daily close below this level could trigger a deeper correction toward the horizontal support near $0.0000050.

The post SHIB near breakout or bull trap? On-chain data signals trouble appeared first on Invezz

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