Shiba Inu Chaikin Money Flow Shows Buyers Are Now Taking Charge Amid Price Decline

The Shiba Inu Chaikin Money Flow shows a divergence between price movement and money flow, indicating that buyers are now taking charge.

Specifically, the Chaikin Money Flow (CMF) on Binance keeps climbing despite Shiba Inu witnessing an intense downtrend along with the rest of the market. This signals that buyers now remain active behind the scenes.

Shiba Inu Chaikin Money Flow Reads Bullish

Shiba Inu has slipped nearly 13% from its weekly peak of $0.00001419. Yet the CMF suggests accumulation is taking place. For the uninitiated, the indicator tracks whether money flows into or out of an asset over a given period, often three weeks. 

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Notably, it calculates this by checking where the day’s closing price lands within the trading range and multiplying that by the day’s traded volume. Positive readings above zero usually indicate steady buying, while negative values translate to selling pressure. 

The further the CMF moves away from zero and the longer it stays there, the stronger the market sentiment it reflects.

Interestingly, on Binance’s SHIBUSDT chart, the CMF has not dropped below zero since Aug. 15, even as SHIB slid with the market. In fact, since Aug. 19, the indicator has been steadily climbing while prices continued to fall, forming a bullish divergence. 

Such divergence often means that sellers are losing momentum and that downward movement may not hold for long.

Right now, the CMF sits at 0.07 while SHIB trades at $0.00001236. The last time the CMF stood at this level, the meme coin traded higher at $0.00001406. This gap suggests SHIB is undervalued at its current price, given the strength of the ongoing money inflow.

SHIB Ichimoku Cloud and DMI Suggest Downtrend is Waning

Meanwhile, as SHIB trades for $0.00001238, the daily Ichimoku Cloud chart shows the bearish momentum remains active with Shiba Inu currently residing just below the cloud. 

Further, the cloud ahead appears thin and flat, which shows that the market lacks strong direction and that both support and resistance remain weak. The Chikou span remains under both the price action and the cloud, another bearish sign. To flip the momentum, SHIB must climb back above the cloud resistance at $0.000013.

Interestingly, the Directional Movement Index (DMI) suggests the downtrend might be waning. The negative directional index (-DI) holds at 24.3, still above +DI, which shows that sellers maintain control, but it appears to have been trending downward. 

The Average Directional Index (ADX) reads 17.1, far below the 20 level that marks strong momentum. This weak ADX suggests that while sellers remain in charge, the bearish trend itself lacks power, leaving SHIB in more of a range than a sharp downtrend.

Amid these metrics, some analysts see potential for a strong reversal. Market watcher Javon Marks recently pointed to Shiba Inu’s ongoing inverse head-and-shoulders pattern, noting that the meme coin is still forming its final shoulder. 

This structure often precedes a major breakout. Marks sets a target more than 540% above current levels at $0.000081. However, he noted that there is also the possibility of a rally higher toward new all-time highs.