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Key Insights:
- Shiba Inu price has rebounded, and technicals point to further gains.
- The rally coincides with the ongoing Ethereum price jump.
- Shiba Inu’s burn rate continues to jump, increasing its deflation.
Shiba Inu price rally gained steam on Monday, July 21, as the crypto market bull run continued. The SHIB meme coin jumped to a high of $0.000016, 57% above its lowest point in June.
Shiba Inu token price has formed numerous bullish chart patterns. Moreover, it has highly positive on-chain metrics pointing to more gains in the coming weeks.
Chart Patterns Point to a 55% Shiba Inu Price Surge
Shiba Inu, one of the biggest meme coins on the Ethereum network, has staged a strong comeback this month as investors bought the dip and the altcoin season index rose.
The daily chart showed that Shiba Inu price formed a highly bullish pattern, known as a double-bottom, at $0.000010. That was its lowest level in April and June this year.
This pattern comprises two distinct bottoms and a neckline, which, in this case, is at $0.00001755. The price target of this pattern is estimated by first measuring the distance between the neckline and the double-bottom.
Its depth is bout 42%, while measuring the same distance from the neckline gives the target at $0.00002500. That’s about 55% above the current level. This target is also slightly above the 61.8% Fibonacci Retracement level.
SHIB price has other highly bullish chart technicals. For example, it has already moved above the 50-day Exponential Moving Average (EMA), a sign that bulls are in control.
Additionally, the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have both jumped. Therefore, the most likely outlook is where the token continues rising in the coming weeks as the altcoin season continues.
Ethereum Price is a Catalyst for SHIB
One of the top catalysts for the surging Shiba Inu price is the soaring Ethereum price, which has skyrocketed in the past few weeks. It has jumped from a low of $1,382 in April to $3,825, its highest level since December last year.
Historically, Ethereum meme coins jump when ETH is rising, and vice versa. For example, SHIB price plunged sharply earlier this year as Ethereum dropped to a multi-year low of $1,382.
Ethereum is surging because of the growing inflows into its exchange-traded funds (ETFs). This growth could accelerate after BlackRock filed to allow staking in its ETF. This move will provide investors with a monthly payout.
SHIB Burn Rate is Soaring
The other bullish catalyst for the Shiba Inu price is the soaring burn rate. Data shows that the rate jumped by 11% in the past 24 hours to 1.19 million. That brought the circulating supply to 584 million.
Token burns are normally bullish because they reduce the circulating tokens, leading to deflation. This, in turn, leads to more confidence among investors.
These burns are often equated to stock buybacks, which reduce the outstanding shares and boost the earnings per share (EPS). In Shiba Inu’s case, the only difference is that holders don’t receive a payout as stock investors do.
Whale and Smart Money Investors are Buying
The other bullish catalyst for the Shiba Inu price is that whales have continued to accumulate tokens in the past few months. These whales now hold over 112 billion SHIB tokens, a 7% monthly increase. Whales are the large investors who have a large sway in an asset’s price action.
Similarly, smart money investors have increased their positions to 6.14 billion SHIB tokens. The ongoing accumulation by retail traders and whales has led to a sharp decline in its circulating supply to 275.4 trillion SHIB tokens.
Could Shiba Inu Price Witness a Major Rally?
Shiba Inu price has been in a deep crash in the past few months. It moved from a low of $0.000010 on June 22 to $0.0000156. This surge could be the start of a prolonged bull run as the meme coin has a combination of strong technicals and fundamentals.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
