Shiba Inu eyes ‘much wow’ 90% breakout as SHIB price paints a textbook bull pattern

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The Shiba Inu (SHIB) market is in a very strong bull market in 2021, and a major continuation pattern on its longer-term charts highlights the possibility of a further 90% rise.

In detail, SHIB rose more than 1,250% year-to-date (YTD) to establish the annual high at $ 0.00003528 (Binance data) on October 8. The cryptocurrency later cracked under sentiment of profit taking, leading to a 41.50%. price correction to $ 0.00002060.

But the bulls have started to accumulate SHIB near this low level. A rebound ensued and the price climbed more than 55% to $ 0.00003200, where it met another round of massive selling. Overall, the SHIB price continued to form higher highs and lower lows in subsequent sessions, forming a triangular structure that resembled a Bull Pennant.

Analysts view Pennants as bullish continuation patterns, that is, their formation, coupled with declining trade volumes, tends to send prices in the direction of their previous trend – up to the height of the previous price rise, also known as Flagpole.

So it seems that SHIB formed the same structure.

12 hour SHIB / USDT price chart with Bull Pennant configuration. Source: TradingView

The height of the SHIB flag pole is approximately $ 0.00002450. Therefore, given that the cryptocurrency would pursue an upward breakthrough from the top of the Bull Pennant (the level at which its upper and lower trendlines converge), its next target would be around $ 0.00005200, i.e. about 90% more.

Still, Pennants are known to be the worst reliable technical indicators, at least according to a study by Cody Hind of the Samurai Trading Academy in 2020, based on his assessment of 10 years of market data and over 200,000. trading structures.

He found that Bull Pennants successfully met their price targets 54.87% of the time.

Macro fundamentals

The SHIB price nearly doubled in October in part due to the cryptic endorsement of Tesla CEO Elon Musk of the Shiba Inu Project and amid reports of whale buying activity and the rise in power. of its decentralized exchange ShibaSwap.

Soecifically, Musk posted his pup Shiba Inu photo on October 4th. The billionaire entrepreneur’s tweet coincided with the SHIB price hike of over 330% over the next four days, recalling how he influenced Dogecoin (DOGE) prices earlier. This year.

The jump was also inspired by reports of whale buying activity in the Shiba Inu market. For the uninitiated, Yahoo Finance pointed out in its Oct. 5 report that an unknown entity bought SHIB 6.2 trillion for about $ 44 million at the end of September.

Related: Shiba Inu Bounces Back 40% Despite Sizable SHIB Whale Sales

Meanwhile, Shiba Inu’s namesake decentralized exchange, ShibaSwap, has detected an increase in the amount held by its cash pools. On Monday, the total value blocked in ShibaSwap contracts was $ 411.42 million compared to $ 253.41 million earlier this month, according to data provided by DeFi Llama.

ShibaSwap TVL as of October 18, 2021. Source: Defi Llama

At its peak in July 2021, ShibaSwap managed $ 1.76 billion in funds through its cash pool.

Ishan Arora, a hedge fund manager associated with Tykhe Block Ventures, told Yahoo Finance that Shiba Inu has emerged as the product of an ongoing craze for cryptocurrencies meme, adding that most people buy these tokens following simply the advice of certain influencers.

Arora cautioned investors about the risks of putting money into such wonders, but mentioned Dogecoin for its ability to generate incredible profits earlier this year.

“The early Doge investors last year did pretty well, so it’s not as black and white as most would like.”

Meanwhile, crypto data tracking service Santiment has detected an increase in Shiba Inu whale transactions of more than $ 100,000 in the past 24 hours, noting that their occurrence is generally bullish for SHIB.

Shiba Inu whale transactions exceeding $ 100,000. Source: Santiment

“When these transactions come in clusters, price increases usually follow,” the platform wrote in a tweet published Monday.

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.