Shiba Inu Price Nears Breakout as $50M in Shorts Face Liquidation

Shiba Inu (SHIB) price drop has recently triggered a sharp pullback, sparking fear among investors and causing bearish sentiment to dominate the market. However, this very decline has set the stage for a potentially explosive reversal, as overleveraged short positions hang in the balance.

While short-term confidence in the token has waned, a technical recovery could set off a liquidation cascade worth tens of millions of dollars — a development that might unexpectedly send SHIB flying upward.

Read Also: Shiba Inu's Burn Rate Increases Significantly

Key Takeaways

• A 10% recovery in Shiba Inu could liquidate over $52 million in short positions.
• SHIB's active address count dropped 36% in 48 hours, signaling weak investor engagement.
• Breaking above $0.00001435 could push SHIB to $0.00001553, reversing bearish sentiment.
• Failure to breach resistance keeps SHIB in a consolidation range, muting volatility.

Shiba Inu Price Pullback Sets the Stage for a Squeeze

SHIB has fallen over the past week, losing key support levels and feeding bearish narratives across the crypto community. This SHIB price drop has attracted significant short-selling activity, as traders bet on further downside.

But the liquidation map paints a different story. According to data from Coinglass, if SHIB stages just a 10% rebound from current levels, over $52 million in short positions could be wiped out.

This type of forced buying — when short traders are liquidated and have to buy back at higher prices — often fuels sharp price recoveries.

It’s a classic short squeeze setup. If Shiba Inu turns upward and traps short traders, cascading liquidations could flood the market with buy pressure, sending prices higher in a short amount of time.

Investor Confidence Slips as Active Addresses Decline

Despite the potential for a short squeeze, SHIB faces a major hurdle: fading investor participation.

According to data from Glassnode, the number of active addresses on the Shiba Inu network has dropped by 36% in the past 48 hours. This sharp decline suggests a drop in user engagement and transactional interest, a worrying sign for bulls hoping for organic recovery.

This retreat may indicate that traders are closing positions and retreating to the sidelines, unwilling to take new bets amid market volatility.

Unless sentiment improves and more wallets reengage with SHIB, the buying strength needed to spark a breakout could remain elusive.

Read Also: Shiba Inu Price Analysis: Whale Outflows and Bearish Trends

SHIB Price Analysis: Resistance at $0.00001435 Is Crucial

At press time, SHIB is trading at approximately $0.00001407, just under a key resistance level at $0.00001435. This zone represents a major decision point for price action.

If SHIB can break and sustain above this resistance level, it may initiate a bullish breakout toward $0.00001553, marking a full 10% recovery. This would not only invalidate bearish setups but also ignite renewed confidence in the altcoin.

On the flip side, if the price remains stuck in the range between $0.00001317 and $0.00001435, SHIB may continue consolidating without triggering large liquidations. This scenario would prevent excessive volatility, offering a temporary reprieve for both bulls and bears.

Market Outlook: Short-Term Neutral, Long-Term Conditional on Breakout

Right now, SHIB sits at a technical crossroads. The risk-reward ratio hinges entirely on whether the token can push past $0.00001435.

For holders, a move above this threshold could lead to a solid upside move with the help of forced liquidations on short positions. For short sellers, the risk is rapidly mounting. Being positioned against a potential squeeze could backfire spectacularly if SHIB regains strength.

Meanwhile, long-term holders will be closely watching on-chain data and market sentiment to determine whether renewed optimism is justified.

Final Thoughts

Shiba Inu's price drop has been painful for many investors, but it has also set the stage for an opportunistic bounce. With more than $50 million in shorts at risk, even a modest rally could fuel a significant price movement.

However, the current lack of network activity and waning trader engagement mean SHIB must overcome both technical and fundamental headwinds before reclaiming its momentum. Breaking above $0.00001435 remains the key to any bullish scenario.

If the breakout occurs, the resulting short squeeze could send SHIB swiftly toward $0.00001553 — and perhaps even beyond.

Read Also: Shiba Inu Price Analysis: Will the Rising Burn Rate Push Price

FAQs

What caused the recent drop in Shiba Inu price?

Shiba Inu saw a sharp decline due to broader market weakness and increased selling pressure from short traders. A drop in active addresses also reflects fading confidence.

How much liquidation could happen if SHIB rebounds?

If SHIB recovers 10% from current levels, over $52 million in short positions could be liquidated, based on Coinglass data.

What is the current resistance level for SHIB?

The immediate resistance sits at $0.00001435. A break above this could lead to a target of $0.00001553.

Why are active addresses important for SHIB?

Active addresses indicate user engagement and transactional activity. A 36% drop in active addresses suggests reduced interest, which can impact recovery potential.

What happens if SHIB fails to break resistance?

If the price remains below $0.00001435, SHIB may continue consolidating in a neutral range, avoiding large moves in either direction.