Dogecoin chart fractal threatens Shiba Inu’s 390% quarterly rally

Shiba Inu (SHIB) turned out to be one of the best investments for the fourth and final quarter of 2021, and its price rose more than 390% in the first week of October. Nevertheless, The meme derivative cryptocurrency now risks erasing most of these gains in the next few sessions.

Yuriy Bishko, a Ukraine-based market analyst, discussed the possible bearish scenario based on recent Shiba Inu price trends, which appear eerily similar to those in the Dogecoin (DOGE) market earlier this year.

For example, SHIB’s price rally in October was followed by a five-month consolidation within a price range of $ 0.00000398. Likewise, DOGE’s sideways trend in February-April 2021, with its bids fluctuating between $ 0.0471 and $ 0.0630, served as the basis for a price rally of more than 500% in late April.

Daily price chart of DOGE / USDT versus SHIB / USDT. Source: Yuriy Bishko, TradingView.com
Dogecoin chart fractal threatens Shiba Inu’s 390% quarterly rally
Dogecoin chart fractal threatens Shiba Inu’s 390% quarterly rally

Bishko said traders who bought Shiba Inu tokens during their sideways consolidation period should sell at least 20-30% of their positions if they are still held after the rally. In the meantime, If SHIB’s net breakout leg exceeds 500%, traders should shed an additional 70-80% of their net holdings.

This is mainly due to the fact that Dogecoin’s supersonic price rally in late April resulted in a correction of around 60%. Bishko added:

“If SHIB repeats the same pattern, [los traders] You can buy more coins with a 60% discount. “

SHIB continues upward trend

The profit-taking strategy emerged when Shiba Inu resumed its bullish trend on Friday after falling 41% on a price correction in the previous session.

SHIB rebounded nearly 27.5% to hit an intraday high of $ 0.00002919, which is very similar to similar upward moves across all major crypto assets including Bitcoin (BTC) and Ether (ETH).. Small-cap tokens tend to follow trends in large-cap markets; For example, SHIB’s price rally of 390% QTD coincided with Bitcoin’s bullish move of 30% over the same period.

SHIB / USDT daily price chart. Source: TradingView.com

At the same time, the Shiba Inu Daily Relative Strength Index (RSI) identified the current price ratings of the cryptocurrency as overbought. Analysts consider an RSI above 70 to be overvalued for an asset, typically with a price correction or sideways consolidation.

Bleeding Crypto, an independent Twitter-based market analyst, believed SHIB would retest its session high of $ 0.00003528. Citing a Fibonacci retracement chart behind its bullish continuation setup, the pseudonymous analyst noted that SHIB’s ability to rebound sharply after falling nearly 50% “is back in business”.

The basics of Shiba Inu seem to be right.

As Cointelegraph pointed out, The team behind the cryptocurrency has been trying to become a competitor in the DeFi space. In detail, at the beginning of July 2021 he launched ShibaSwap, a decentralized cryptocurrency exchange platform whose liquidity pool now amounts to more than 360 million US dollars.

In addition, Shiba Inu speculators have shown interest in introducing 10,000 non-fungible tokens (NFTs) called “Shiboshi” over the next week.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you must conduct your own investigation when making a decision.

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