Key Shiba Inu Takeaways:
- Shiba Inu, the Oct 2021 overachiever of the meme-coin culture, could get back on its feet after the Dec-Jan plunge.
- However, further developments depend on Bitcoin, and the wider market climate.
YEREVAN (CoinChapter.com) – Shiba Inu (SHIB) recovered 74% of its value after bottoming out at $0.000017 on Jan. 22. The oversold bounce came in confluence with the crypto recovery led by Bitcoin (BTC) that took SHIB to a three-week high of $0.000029 in the Asian Pacific session on Feb. 7.
Moreover, the digital asset traded in a bullish Falling Wedge setup for over three months. The latter comprises two down-sloping, converging trendlines, and predicted a bullish phase after the token breaks the resistance.
Also read: Ethereum whales gobble up Shiba Inu (SHIB) with no effect on the price.
SHIB broke the formation’s upper trendline on Feb. 6 but halted the rally after recoiling from the 50-day exponential moving average (EMA-50).
If Shiba Inu continues to correct south, it could seek support from the $0.000026 line. However, the meme-coin could break over its EMA-50 and continue the uptrend if Bitcoin’s green candles persist.
Crypto market going bullish?
Two weeks of price ascend are not enough to conclude that the long-term bias on the crypto market has turned bullish after a two-month landslide. Other factors are at play, such as risk assets, including stocks and equities, and the volatility across the market.
According to the latest data, the equities market saw a substantial inflow in the previous month, the second-largest Jan inflow since 2001.
Also read: Shiba Inu loses popularity despite a 17% SHIB price surge.
Additionally, the stock market index (S&P500) grew over 6% since bottoming out on Jan. 24. So risk assets, like stocks and equities, could rise in confluence, which generally includes the crypto market as well.
Not so fast
Like most cryptos in the top 100, Shiba Inu has rallied significantly since late Jan. However, the long-term prognosis is far from certain. The current recovery does not constitute a consistent bullish market and could be a temporary bounce, as it has happened numerous times before.
For example, in Q3-Q4 2019, despite the bearish phase, Bitcoin managed a 33% uptrend in a month before sliding back in the following weeks. Similarly, after the devastating May of 2021, the alpha crypto rose 23% in three weeks, then wiped all the gains and more in the following months.
Also read: If the dollar sinks, Bitcoin will recover, says FX analyst.
While mimicking Bitcoin’s price action is not an effective long-term strategy for Shiba Inu, the 74% gains soothed the SHIB bulls. The upcoming sessions will tell if the bullish phase will last.
