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The sharp upward retracement appears as the retail frenzy surrounding Shiba Inu suggests a test of May peak levels.
Shiba Inu (SHIB) opened the new week in the green, continuing its bullish retracement move from last week’s low of $0.00002058.
On Oct. 11, SHIB’s price reached an intraday high of $0.00002907, netting over 40% returns from its ongoing rebound trend. As a result, the Dogecoin-inspired meme cryptocurrency aimed for a long run up to its technical resistance level near $0.00002978, as shown in the chart below.
Extended rally ahead?
The Shiba Inu chart also revealed traders’ intent to buy SHIB tokens when the price tested the 20-4H exponential moving average (20-4H EMA; the green wave) as support.
According to Santiment data, the cryptocurrency dropped by more than 40% on Thursday after Shiba Inu’s addresses worth 1 million–10 million SHIB dumped over 31 billion tokens, the largest dump in six months. However, the price began to recover as traders began to accumulate SHIB tokens near the 20-4H EMA.
Additionally, Shiba Inu’s ongoing retracement took cues from a potential correlation between the 1million–10 million SHIB address dump and its price. Santiment noted that Shiba Inu’s price rebounds every time after SHIB millionaires dump their holdings, as shown in the chart below.
That shows micro traders’ intention to absorb massive selloffs.
Retail sentiment moons
The bullish retracement in the SHIB market coincided with a rising number of internet queries for the keyword “Shiba Inu,” as per Google Trends.
Web data shows a rise in the Shiba Inu trend in the United States on a 12-month interest timeframe, signaling booming retail interest. At 92, the trend is closer to the peak popularity score of 100, last seen in the second week of May. It indicates that more internet users are looking for information on Shiba Inu.
Nevertheless, the internet queries for the keyword “how to buy Shiba Inu” came out to be only 18 in the same period. Nonetheless, compared to the previous week, the interest shot up by 260%.
Tale of two indicators
On a technical front, SHIB’s latest rebound move appears to have invalidated a bearish setup that Cointelegraph discussed in one of its previous coverages.
Specifically, SHIB’s price broke bullish out of an otherwise bearish descending triangle pattern as it closed above the structure’s upper trendline with a rise in trading volume. While the breakout still awaits confirmation, it has boosted the prospects of bullish continuation.
The reason for an extended upside is a makeshift bull pennant, which typically sends the price higher by as much as the height of the previous upside move. In other words, SHIB’s breakout above its bull pennant pattern could send its price to $0.00004713.
Meanwhile, should the price slip back inside the pennant range, it would risk reactivating the descending triangle setup. In doing so, SHIB may eye a correction toward $0.00002195, followed by a negative breakout move toward $0.00001000.