The bearish divergence observed on the Relative Strength Index (RSI) for Shiba Inu 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 heed.

At the heart of the matter is the conspicuous bearish divergence on 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 signify an overbought condition and values below 30 indicate an oversold condition. A bearish divergence occurs when the price records higher highs, while the RSI charts lower highs. This incongruity often precedes a potential price reversal.

By evaluating the SHIB chart, we can identify a clear upward trend in price, with SHIB reaching new highs. Conversely, the RSI is failing to mirror this bullish movement and is instead showing a series of descending peaks. This divergence is a red flag, cautioning that the bullish momentum might be losing steam, and a price reversal could be on the horizon.

What's even more concerning for SHIB holders is the broader context. The past 80 days have been particularly challenging for SHIB. Prices remained stagnant, with the token struggling to gain traction. The recent uptrend marked one of the first significant price growth instances in nearly three months. A reversal now would be a devastating blow to the community's morale, leaving Shiba Inu in a precarious position.

While Shiba Inu's recent price movement provided a glimmer of hope to its dedicated community, the bearish divergence on the RSI signals potential stormy waters ahead. Investors and traders should be ready for a potential correction.

About the author

Arman Shirinyan