‘Much ow’ ahead? Dogecoin chart fractal puts Shiba Inu’s 390% QTD rally in jeopardy

Shiba Inu (SHIB) has become one of the best investments in the fourth and final quarter of 2021, with prices rising over 390% in the first week of October. Nonetheless, there is a risk that the spin-off meme cryptocurrency will now wipe out most of those gains in the upcoming sessions.

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

For example, SHIB’s price rally in October followed five months of consolidation within a price range of $ 0.00000398. Similarly, DOGE’s sideways trend from February to 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.

DOGE / USDT vs. SHIB / USDT daily price chart. Source: Yuriy Bishko, TradingView.com

Bishko said traders who bought Shiba Inu tokens during their sideways consolidation period should sell at least 20-30% of their positions if they hold up after the rally. If SHIB’s net breakout distance exceeds 500%, traders should shed an additional 70 to 80% of their net inventory.

That’s mainly because Dogecoin’s supersonic price rally resulted in a correction of around 60% in late April. Bishko added:

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

SHIB continues upward trend

The profit-taking strategy appeared 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, roughly in line with similar upward moves across all top crypto assets, including Bitcoin (BTC) and Ether (ETH). Small-cap tokens typically follow trends in the top-cap markets; For example, SHIB’s price rally of 390% since the current quarter (QTD) coincided with Bitcoin’s 30% upward movement over the same period.

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

At the same time, Shiba Inu’s 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 that typically follows either a price correction or a sideways consolidation.

Bleeding Crypto, a Twitter-based independent 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 strongly after falling nearly 50% meant “it is back to business”.

$ SHIB It looks like the 50% FIB will be enough for $ SHIB and it’ll get back to business. Pretty impressed. I missed this whole train, but I still like to admire the TA. Good luck guys! pic.twitter.com/Ql9NI3rL0t

– Bleeding Crypto (@Bleeding_Crypto) October 8, 2021

The basics of Shiba Inu seem to be right.

As Cointelegraph mentioned, the team behind cryptocurrency has been trying to become a contender in the DeFi space. Specifically, in early July 2021 it launched ShibaSwap, a decentralized cryptocurrency exchange platform that now has over $ 360 million in its liquidity pool.

Related: Will Dogecoin Follow The 400 Percent Shiba Inu (SHIB) Outbreak?

In addition, Shiba Inu speculators have shown interest in launching 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 step of investing and trading involves risk, so you should do your own research when making a decision.

Comments are closed.