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The Dogecoin fork outpaced popular blockchain protocols such as Stellar and Polygon to become a $11 billion cryptocurrency project.
The rise in the price of Shiba Inu (SHIB) so far in October has propelled the SHIB token to the 20th position in terms of market capitalisation.
Shiba Inu’s circulating market valuation jumped to $11.08 billion earlier this week and is now above $10 billion, putting it in the top-20 in terms of market capitalisation for the first time. As a result, the Dogecoin-inspired meme cryptocurrency surpassed popular blockchain projects such as Stellar (XLM), Polygon (MATIC), and Tron (TRX).
The increase in Shiba Inu valuation followed Elon Musk’s tweet. On Oct. 4, Tesla CEO Elon Musk posted a photo of his pet dog, a Shiba Inu, with the caption “Floki Frunkpuppy.” An hour after the tweet, SHIB increased by more than 40%.
Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf
— Elon Musk (@elonmusk) October 4, 2021
Crypto speculators frequently overreact to Musk’s tweets. For example, earlier in 2021, the billionaire entrepreneur was instrumental in driving the Dogecoin (DOGE) price higher via Twitter.
After beginning the fourth quarter of 2021 at $0.00000725, the price of SHIB increased by nearly 400% in a week. As a result, on Oct. 7, the token retested its five-month high of $0.00003528.
Nonetheless, SHIB experienced a 40%+ price correction on the same day as some traders decided to unwind their spot positions for interim profits. As a result, Shiba Inu’s market cap fell along with it, reaching as low as $8.06 billion in October.
The sell-off in Shiba Inu markets versus the dollar and Bitcoin (BTC) prompted a buy-the-dip mentality. A rebound rally ensued, causing the SHIB price to rise by more than 45 percent. On October 9, the token was trading for $0.00003020, with a market cap of around $10.73 billion.
What is next for SHIB?
The Shiba Inu price dropped on Oct. 9 by more than 5% to reach a fresh intraday low of $0.00002575. In doing so, the cryptocurrency hinted at forming a potential descending triangle pattern, suggesting additional losses ahead.
In detail, descending triangles are typically bearish patterns that form when the price trends lower while fluctuating between an area defined by two converging trendlines: one falling and the other horizontal, such as the ones SHIB has formed in the chart below.
The formation of lower highs atop a stationary support line indicates that traders’ buying sentiment is deteriorating. As a result, the price eventually breaks below the horizontal trendline. As a result, its target is changed to a level with a length equal to the maximum triangle height.
In other words, if the above-mentioned support level fails to hold, the SHIB price may fall below $0.00001000 in the coming sessions.