Shiba Inu (SHIB) emerged as one of the best investments in the fourth quarter and late 2021, with prices rising more than 390% in the first week of October. However, the cryptocurrency meme spin-off is now threatening to wipe out most of those gains in upcoming sessions.
Yuriy Bishko, a market analyst based in Ukraine, discussed a potential downside scenario based on the recent Shiba Inu price trend, which strangely seems to be similar to what the market is seeing in the Dogecoin (DOGE) market earlier this year.
For example, SHIB’s October rally followed five months of consolidation in a broad price range of $ 0.00000398. Similarly, DOGE’s February-April 2021 sideways trend, with its bids rising between $ 0.0471 and $ 0.0630, underpinned a rally of more than 500% in February in late April.
Bishko said traders who bought the Shiba Inu token during its sideways consolidation should sell at least 20-30% of their positions if they still hold after the rally. When the net breakout of SHIB exceeds 500%, investors should sell 70-80% more of their net holdings.
This was mainly due to the fact that the Dogecoin supersonic rally at the end of April resulted in a correction of around 60%. Bishko added:
“If SHIB repeats the same pattern, [traders] can buy more coins with 60% discount. “
SHIBA Inu continues upward trend
SHIB rebounded nearly 27.5% to hit an intraday high of $ 0.00002919, which is in good line with similar upward moves across all of the top crypto assets, including Bitcoin (BTC) and Ether (ETH). Small-cap tokens usually follow trends in the markets with the highest market capitalization; For example, SHIB’s 390% quarter-to-date rally (QTD) coincided with Bitcoin’s 30% bull run over the same period.
At the same time, Shiba Inu’s Daily Relative Strength Index (RSI) has identified the current valuation of the cryptocurrency as overbought. Analysts believe an RSI above 70 is overvalued for an asset, often after a correction or sideways consolidation.
Bleeding Crypto, an independent market analyst based on Twitter, predicts that SHIB will retest its safe high of $ 0.00003528. Citing a Fibonacci retracement chart behind its bullish continuation setup, the pseudonymous analyst noted that the SHIB’s strong rally after falling nearly 50% means “it will work.”
– Cryptocurrencies are bleeding (@Bleeding_Crypto) October 8, 2021
The basics of Shiba Inu seem to be right.
As Cointelegraph mentioned, the team behind cryptocurrency has been trying to be a contender in the DeFi space. In particular, in early July 2021 it launched ShibaSwap, a decentralized cryptocurrency exchange whose liquidity pool is currently over $ 360 million.
Related: Will Dogecoin Follow Shiba Inu (SHIB) 400% Breakout?
In addition, Shiba-Inu speculators have shown interest in the launch of 10,000 indistinguishable tokens (NFTs) next week, known as “Shiboshi”.