Shiba Inu (SHIB<\/a>) looks poised to undergo sharp price corrections after rallying nearly 75% in almost two weeks.<\/p>\n On Monday, the memecoin climbed to $0.00002961, its best level since Jan. 18, amid renewed buying interests across the cryptocurrency market<\/a>. Before the retracement, SHIB\u2019s price had crashed by almost 80% from its record high of $0.00008870.<\/p>\n Nonetheless, the wild price recovery also came closer to triggering two classic sell signals. First, SHIB\u2019s daily relative strength index (RSI), a technical indicator that fluctuates in the range between 0 and 100 to signal whether an asset is overbought (RSI>70) or oversold (RSI<\/p>\n Last, SHIB\u2019s daily relative volatility index (RVI), which measures the standard deviation of low and high prices, dropped below 50, a sell signal. In a \u201cperfect\u201d scenario, traders close their long positions after the RVI drops below 40. At the time of writing, it came out to be near 48.<\/p>\n More cues for a possible SHIB price correction came from three other technical indicators. First, the Shiba Inu token\u2019s current upside momentum showed signs of weakening near its 50-day exponential moving average (50-day EMA; the red wave in the chart below) at around $0.00002761.<\/p>\n Second, SHIB\u2019s ongoing uptrend accompanied lower volumes \u2014 i.e., they came out to be nowhere closer to the volumes witnessed during the token\u2019s October 2021 price rally. That showed scant liquidity in the Shiba Inu market<\/a>, making it harder for traders to execute buy and sell orders at desired levels. <\/p>\n As a result, a lower liquid market tends to witness wilder price swings in either direction.<\/p>\n Lastly, SHIB\u2019s price\u00a0neared a key pullback level<\/a> of $0.00003358 that coincided with the 0.618 Fib line of the Fibonacci retracement graph drawn from the $0.00000507 swing low to the $0.00007971 swing high. In conjugation with alarmin RSI and RVI readings, the $0.00003358 level posed as an ideal derisk zone for traders looking to secure interim profits.<\/p>\n Norok, an independent market analyst, wrote<\/a>\u00a0that the latest SHIB price rally has brought out \u201cexcellent short opportunities.\u201d He cited a fractal from November 2021 that showed SHIB undergoing a fake recovery rally of nearly 42% in two days but followed it with a 70% downside move later.<\/p>\n \u201cEach rally, far from being the fresh breath of hopium owners desire, has provided excellent short opportunities for months,\u201d Norok explained, adding:<\/p>\n \u201cThis one is a clear pullback to test and hold Resistance and a good opportunity to add to the short where profit was taken at the start of January.\u201d<\/p><\/blockquote>\n The statements appeared as bearish positions lost millions of dollars during the recent SHIB price recovery. For instance, data from Coinglass showed<\/a> over $10 billion worth of liquidations for traders of Shiba Inu-backed investment products, around 75% of which were short entries.<\/p>\n Nonetheless, Binance\u2019s 1,000-SHIB futures product, which holds 1,000 Shiba Inu tokens per contract, looked slightly skewed toward bears, with its long\/short ratio coming out to be 0.93 on a 24-hour adjusted timeframe. <\/p>\n In detail, the long\/short ratio represents the amount of net long positions opened against the net short positions opened. A reading above 1 indicates that most open market positions are skewed long. Conversely, a reading below 1 indicates that the market bias is currently skewed toward shorts.<\/p>\n Meanwhile, the long\/short ratio of SHIB futures on FTX was also near 0.97, suggesting the market\u2019s bearish outlook on a 24-hour adjusted timeframe.<\/p>\n The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.\n<\/p>\n<\/div>\nSHIB\u2019s price rallied to mid-January highs\u00a0<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-02\/f5c82c4e-ea50-479b-b663-884e328b29e8.png\")
Additional bearish signals<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-02\/c885cc0a-50d9-4762-86b4-272e1e64b485.png\")
Short the SHIB rally?<\/h2>\n
![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-02\/5e6e9846-559f-4ab4-8d60-e1da7e97aaf6.png\")
![\"\"](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-02\/b1b3e76a-9618-4b98-810d-33450eee56ba.png\" "\\"\\"")