Shiba Inu price analysis: Is another 35% rally on its way?

• Updated

Shiba Inu could extend its rally in the near term

Shiba Inu logo on mobile phone                                 
Shiba Inu has closed in on the downtrend line, but what’s going to happen next? – Photo: Shutterstock
                                

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Bitcoin’s rally above $25,000 and Ether’s move above $2,000 has increased confidence among crypto investors that the worst of the bear market may be over. In turn, that may have encouraged aggressive traders to take on more risk and pile into Shiba Inu, which boosted the price of SHIB by more than 33% on 14 August. After a minor correction on 15 August, the bulls are again attempting to drive Shiba Inu’s price above the overhead resistance as of 16 August 2022.

While sharp rallies generally have a strong trigger, sometimes it is difficult to pinpoint a particular catalyst. One of the reasons that may have generated investor interest in Shiba Inu is the game Shiba Eternity. 

On 11 August, Shytoshi Kusama, Shibarmy’s lead influencer, tweeted that the game was available for testing on the iOS platform in Vietnam.

Another minor positive was the announcement on 5 August that Binance Card had added support to Shiba Inu along with Ripple and Avalanche. This increases the use case for SHIB as Binance Card holders living in the European Economic Area can spend the cryptocurrencies at more than 60 million merchant outlets.

Could buyers sustain the momentum at higher levels? Could Shiba Inu go up further? Read the SHIB price analysis to find out.

Shiba Inu price technical analysis: Weekly chart

Shiba Inu weekly price analysis chart for 16 August 2022
Shiba Inu weekly price analysis chart for 16 August 2022 – Credit: Currency.com

SHIB’s price rallied sharply last week and broke above the 20-week exponential moving average (EMA). The SHIB/USD pair finished the week near the strong overhead resistance at the downtrend line.

Two previous rallies reversed direction from the downtrend line hence this is an important level to keep an eye on. If buyers thrust the price above this resistance, the pair could signal a potential trend change. The pair could then rally to the 50-week simple moving average (SMA).

The 20-week EMA has flattened out and the relative strength index (RSI) is near the midpoint, indicating that the bears may be losing their grip.

This positive view will invalidate in the near term if the price turns down sharply and breaks below the 20-week EMA. Such a move will suggest that the bears continue to defend the downtrend line. That could sink the price back to the $0.000011 level.

Shiba Inu price technical analysis: Daily chart

Shiba Inu daily price analysis chart for 16 August 2022
Shiba Inu daily price analysis chart for 16 August 2022 – Credit: Currency.com

SHIB’s price broke above the 20-day EMA on 27 July but the bulls could not build upon the momentum for several days. The pair soared above the overhead resistance of $0.000014 on 14 August and reached close to the downtrend line.

This sharp up-move pushed the RSI deep into the overbought zone, which may have tempted short-term traders to book profits. The price pulled back on 15 August, but a positive sign is that the bulls did not allow the pair to sink below the breakout level of $0.000014.

The bulls will again attempt to thrust the price above the downtrend line. If they manage to do that, the pair could start an up-move to $0.000022 and then to $0.000029.

Contrary to this assumption, if the price turns down from the current level and breaks below $0.000014, it will suggest that traders may be rushing to the exit. That could pull the price to the 20-day EMA.

Shiba Inu: Buy or sell this week?

Shiba Inu’s price analysis suggests that if bulls push the price above the downtrend line, the uptrend could resume. The pair could then rally to $0.000022 and thereafter to $0.000029. Conversely, a break below $0.000014 will invalidate the bullish setup in the near term.

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision. 

Further reading

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