YEREVAN (CoinChapter.com) – A canine-inspired meme coin Shiba Inu rallied a whopping 375% from Oct 1 to Oct 7. A sharp downtrend followed as whale addresses shed over 31 billion SHIB coins in the largest “whale dump” since the digital asset’s launch in May 2021. However, SHIB recovered 40% since the dip. Is another leg up underway?
Recent Shib fluctuations
The self-proclaimed “Doge killer” had a volatile two weeks, with violent price fluctuations. As mentioned, the recent upside retracement came in the wake of the largest sell-off in SHIB’s short history.
Addresses in control of 1-10 million coins, aka whales, dumped the digital asset to secure the gains of over 375% acquired during the preceding week. The on-chain analytics platform Santiment reported the news, tweeting the chart on Oct 11.
The social media hype plays a major role in propelling the price when it comes to the fleet of Japanese dog-inspired meme-coins like Dogecoin, Shiba Inu, Floki, etc. However, SHIB’s recent uptrend did not follow any tweets by famous proponents, such as the billionaire entrepreneur and meme-coin enthusiast Elon Musk.
Moreover, it faced criticism from another expert and the man behind the ‘Big Short’ book. Michael Burry, the founder of the private asset management firm Scion Asset Management, called the meme-coin and its explosive rally “pointless.”
But Shiba Inu didn’t mind and climbed to the 16th rank by market cap ($12 billion). The SHIB/USD pair traded 0.00003098 in the Monday session. The gains might not be over, as the technical indicators suggest a bullish continuation for the “pointless” SHIB.
Shiba Inu’s Pennant formation
The “doge killer” traded in a bullish Pennant for five days and broke out of the pattern in the Asian-Pacific session on Oct 11. The pennant formation consists of two converging trendlines with a similar slope that encloses the price action and lowers the price swing amplitude.
The Pennant typically occurs after a sharp price action with a pronounced bias. In the case of Shiba Inu, it formed after the 375% rally. Thus, the SHIB bulls could expect a continuation and further gains.
Moreover, the meme-coin traded above its 20-4h exponential moving average (EMA-20: blue wave) for over three days. The MA could provide additional support for the digital asset. The relative strength index (RSI; purple graph at the bottom) also exhibited bullish signs.
In hindsight, RSI is a momentum indicator that reflects the traders’ perception of a digital asset. Thus, when the RSI is in the 50-70 range, the traders are likely to think of the asset as a profitable investment.
The bullish factors listed above hint at continuing the rally and further gains for the meme-coin supporters.