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Shiba Inu (SHIB) has emerged as one of the top investments heading into the fourth and final quarter of 2021, with its price increasing by more than 390% in the first week of October. Nonetheless, the meme-derived cryptocurrency is now at risk of wiping out most of those gains in the coming sessions.
Yuriy Bishko, a Ukraine-based market analyst, discussed the potential bearish scenario based on recent Shiba Inu price trends, which appear eerily similar to those seen in the Dogecoin (DOGE) market earlier this year.
For example, SHIB’s price hike in October followed five months of consolidation in a price range of $ 0.00000398. Likewise, DOGE’s sideways trend in February-April 2021, where its bids bounced between $ 0.0471 and $ 0.0630, served as the basis for a price hike of over 500% in late April.
Bishko said traders who bought Shiba Inu tokens during its sideways consolidation phase should sell at least 20-30% of their positions if they still hold after the rally. Meanwhile, if the net stretch of the SHIB breakout exceeds 500%, traders should give up an additional 70-80% of their net holdings.
This is mainly because Dogecoin’s supersonic price rally in late April resulted in a correction of around 60%. Bishko added:
“If SHIB repeats the same pattern, [traders] can buy more parts with 60% discount.
SHIB returns to the uptrend
The profit-taking strategy emerged as Shiba Inu resumed its bullish trend on Friday after falling 41% during a price correction in the previous session.
SHIB rose nearly 27.5% to an intraday high of $ 0.00002919, which is very much in line with similar upward moves across all major crypto assets including Bitcoin (BTC) and Ether (ETH ). Small cap tokens generally follow trends in large cap markets; for example, SHIB’s 390% price rise in the quarter (QTD) coincided with Bitcoin’s 30% rise in the same period.
At the same time, the daily Shiba Inu Relative Strength Index (RSI) identified the cryptocurrency’s current price valuations as being overbought. Analysts consider an RSI above 70 to be overly valued for an asset, usually followed by a price correction or sideways consolidation.
Bleeding Crypto, an independent Twitter-based market analyst, predicted that SHIB would retest its session high of $ 0.00003528. The pseudonymous analyst cited a Fibonacci retracement chart behind its bullish continuation pattern, noting that SHIB’s ability to rebound strongly after falling nearly 50% meant it was “resuming trading.”
$ SHIB Seems like 50% FIB is enough to $ SHIB and his return to business. Quite impressed. I missed this whole train but I still love to admire the TA. Good luck guys! pic.twitter.com/Ql9NI3rL0t
– Bleeding Crypto (@Bleeding_Crypto) October 8, 2021
The fundamentals of Shiba Inu seem to match.
As Cointelegraph covered earlier, the team behind the cryptocurrency has attempted to become a competitor in the DeFi space. In detail, it launched ShibaSwap, a decentralized cryptocurrency exchange, in early July 2021, which now has more than $ 360 million stuck in its liquidity pool.
Related: Is Dogecoin Ready To Track Shiba Inu (SHIB) 400% Breakthrough?
In addition, Shiba Inu speculators have also expressed interest in the launch next week of 10,000 non-fungible tokens (NFTs), dubbed “Shiboshi”.
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 comes with risk, you should do your own research before making a decision.
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