SHIB was one of the best investments of Q4 2021, rising more than 390% in the first week of October. However, the meme coin risks wiping out most of those gains in the coming week.
Yuriy Bishko, a Ukraine-based market analyst, has to discuss about the potentially bearish scenario based on SHIB’s recent trend which is eerily similar to what was observed in the DOGE market earlier this year.
For example, SHIB rallied in October after 5 months of consolidation in a broad price range of $ 0.00000398. Similarly, DOGE remained unchanged from February to April 2021, where the price rose about $ 0.0471 to $ 0.0630, underpinning a rally of more than 500% in late April.
Daily price chart from DOGE / USDTB and SHIB / USDT | The source: Yuriy Bishko, TradingView
Bishko advises traders who bought SHIB during the sideways consolidation to sell at least 20-30% of their positions if they still hold after the rally. If SHIB’s net breakout rate exceeds 500%, another 70-80% should be sold.
This was mainly due to the fact that DOGE’s galloping rally led to a correction of around 60% at the end of April. Bishko added:
“If SHIB repeats the same pattern, dealers can buy more with a discount of 60%.”
SHIB continues upward trend
The profit-taking strategy came about when SHIB resumed its uptrend on Friday after falling 41% in a correction in the previous session.
SHIB rose nearly 27.5% to hit an intraday high of $ 0.0002919, similar to the upward moves of all top coins like BTC and ETH. Small-cap coins often follow the trend of the large-cap market. For example, SHIB’s 390% quarter-to-current (QTD) rally coincided with Bitcoin’s 30% bull run over the same period.
The source: TradingView
At the same time, SHIB’s Daily Relative Strength Index (RSI) is currently overbought. An RSI above 70 is considered an overvalued asset that often results in a sideways correction or consolidation.
Bleeding Crypto, an independent market analyst, has predicted that SHIB will retest the high of $ 0.00003528. Citing a fib retracement chart based on a bullish expansion setup, he noted that the strong rebound in the SHIB after falling nearly 50% means “it will work again”.
$ SHIB Looks like the 50% FIB is enough for $ SHIB and it’s back to business. Pretty impressed. I missed this whole train, but I still like to admire the TA. Good luck guys! pic.twitter.com/Ql9NI3rL0t
– Bleeding Crypto (@Bleeding_Crypto) October 8, 2021
“Looks like 50% FIB is enough for SHIB and it should work again. Impressively. I missed this whole train but I still love it monitor. Much luck“.
The SHIB basics seem to agree.
As mentioned earlier, the SHIB research team tried to compete in the DeFi space when it launched its decentralized exchange, ShibaSwap, in early July 2021, whose liquidity pool is currently tied up over $ 360 million.
In addition, SHIB speculators also showed interest in rolling out 10,000 NFT next week, called “Shiboshi”.
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According to Cointelegraph