Shiba Inu Bears Tighten Grip as Funding Rate Signals Growing Pessimism

Technical patterns and on-chain metrics suggest that Shiba Inu sentiment has shifted decisively bearish, with multiple indicators now aligning to point toward further downside pressure in the near term.

Technical Setup Points to Deeper Losses

The price action of SHIB has deteriorated significantly across the timeframe analysis. The token is now trading firmly below both its 50-day and 200-day exponential moving averages, confirming that bears maintain price control. More concerning is the formation of a head-and-shoulders pattern on the daily chart, one of the most reliable reversal structures in technical trading. The pattern’s shoulders sit at $0.00015, while the neckline—the critical support level—rests at $0.00001027.

The momentum oscillators reinforce this bearish picture. The Relative Strength Index has broken through the neutral 50 level to the downside, while the MACD remains flatlined near zero, suggesting declining momentum. Should SHIB break below the neckline support, the next target would be substantially lower, opening the door to accelerated selling.

Funding Rate Collapse Reflects Shorting Conviction

Perpetual futures markets are displaying some of the most extreme positioning in months. The weighted funding rate for Shiba Inu has plummeted to minus 0.0074%—its lowest point since earlier in the year. When funding rates turn negative, it signals that short sellers are paying long holders a fee, a dynamic that typically emerges when traders believe future prices will undershoot the current spot price.

This shift in funding dynamics represents a structural change in how the market is positioned. The divergence between spot and futures pricing has become pronounced, with shorts gaining conviction that downside is imminent.

On-Chain Behavior Signals Capitulation

Exchange inflows tell a telling story about investor sentiment. On Monday, August 19, notable volume—exceeding $1.15 million—moved onto exchange wallets for the first time in over two weeks, a classic distribution signal. This uptick in exchange deposits typically precedes price declines as holders prepare to exit positions.

Whale activity has stalled in a concerning way. The largest addresses hold approximately 61.7 billion tokens, a level that has remained static since early August. Similarly, cumulative whale positions have hovered near 45 billion throughout the month without meaningful accumulation. The absence of whale buying during weakness is a negative sign—smart money is sitting on the sidelines.

Daily trading volume has also compressed to $204 million, significantly trailing that of competing meme tokens like Pepe, Dogwifhat, and Floki. Lower volume on down days often accelerates drawdowns due to reduced liquidity.

Market Context: Shiba Inu Amid Broader Selloff

The immediate catalyst for SHIB’s decline stems from broader crypto market deterioration. Bitcoin and altcoins moved sharply lower on Monday, with BTC pulling back substantially. SHIB fell 3.65% that day, reaching lows near $0.00001263. However, the technical and futures data suggest that Shiba Inu weakness may extend beyond sympathy selling, driven by its own deteriorating fundamentals and positioning.

The convergence of bearish technical signals, negative funding rates, and concerning on-chain flows creates an environment where additional losses appear likely without a meaningful shift in sentiment or price structure.