The broader cryptocurrency market experienced significant selling pressure during Wednesday's Asia session, impacting meme coins particularly hard. Shiba Inu (SHIB) recorded a near 5% drop in the last 24 hours, reflecting a rise in risk-off sentiment among traders that also saw U.S. equity futures decline.
The crypto market witnessed over $465 million in liquidations over the past day, with long positions accounting for more than half. This marks a stark reversal from the prior two days where short positions faced the brunt. Amid this downturn, Shiba Inu's trading volumes crashed by 53.33% to $194.67 million, according to CoinMarketCap data, suggesting a sharp decline in trader activity and positioning.
This volume drop aligns with a broader market phenomenon of thinning liquidity following the sell-off in the latter months of 2025. On-chain analytics platform Glassnode highlighted that Bitcoin and aggregate altcoin spot volumes have reached their lowest levels since November 2023, indicating weakening demand despite the price surge seen at the very start of 2026.
However, the technical picture for SHIB shows signs of potential improvement. The meme coin briefly deleted a zero from its price, tagging $0.00001017 on January 5th—its first time reaching that level in 56 days—before facing strong psychological resistance and pulling back to around $0.0000087. This move, while brief, broke a significant psychological barrier.
Analysts note that while SHIB failed to reclaim the long-term downtrend defined by the 100-day Simple Moving Average (SMA), the mid-term 50-day SMA has flipped bullish. This reclaiming of the moving average is seen as a meaningful shift in structure, creating a firmer footing for a potential sustained upside move if market conditions improve.
The momentum indicator MACD has posted its widest lead over the signal line since July, pointing to easing fear and improving trend strength. However, the Relative Strength Index (RSI) is pressing into the overbought zone near 70, which often precedes a short-term pullback as buyers cool off.
From a broader pattern perspective, a 21-month bullish falling wedge breakout is now in focus. A sustained breakout from this wedge formation could theoretically drive a move of 270% toward late-2024 highs near $0.0000245, or even extend 430% to $0.0000367 if bullish sentiment accelerates and capital rotates back into speculative assets like SHIB.
Despite the current volatility and volume decline, there is a silver lining for the meme coin sector. The meme coin market's dominance is seeing a rebound after reaching rare lows in December 2025. If this trend is sustained, it could potentially usher in a new meme coin season characterized by significant price surges across the category.
