After peaking above the $0.000080 level back at the end of October, the Shiba Inu (SHIB) price has been in a downward trend channel ever since. Support levels at $0.000070, $0.000056 and $0.000044 all broke on the low side, muddying the technical picture for traders. However, with a clean break over the past day of the downward trend channel on the 4hr candles, the coin trades at $0.0000485. Here’s what we feel we need to see in order for the pair to make fresh all-time highs.
One of the main reasons for the jump in the near term was the confirmation of listing of SHIB on Kraken. It’s a sizeable crypto exchange, and one of the largest that didn’t offer the coin out to investors. Simply put, the more places that offer SHIB as a tradable asset, the more volume will be pumped through the coin.
Clearly, this can be either buying or selling, but for the most part the initial phase once added on a platform is clients buying. Looking forward, we feel that other retail heavy platforms need to list the coin to keep momentum going. For example, Robinhood doesn’t currently offer it out. In the UK, companies such as IG Group and CMC Markets also do not offer it out as part of their crypto offering.
If we see SHIB listed on more places, this would be a key support to seeing the price trade higher.
The second prerequisite in our opinion for the SHIB price to break back above $0.000080 is risk sentiment. The news out in recent days regarding the new Covid-19 variant (and the potential lack of efficacy from existing vaccines) is hurting traditional assets such as stocks.
The long-time raging argument of whether crypto should be inversely correlated to stocks remains to be seen. However, if SHIB can keep gains coming despite souring risk sentiment elsewhere then this would be a huge plus going into December.
We aren’t saying that SHIB is going to become a sage haven in the same way that gold is, but if investors can see it as an uncorrelated asset to other classes then negative risk sentiment could act as a support. Money flowing out of stocks will likely be parked mostly in cash, but if investors see positive gains for the coin then an allocation might be made.
The final thing we’d need to see to support the SHIB price moving higher would be a consolidation in the Bitcoin price. Traditionally, during a consolidation period we see what’s known as altcoin season. With a stalling Bitcoin, investors tend to cycle out of it and into altcoins such as SHIB.
For the moment we’re still seeing volatility in BTC, so don’t feel like flows are being mobilized at present. However, if we did see this move towards the end of the year then SHIB is well placed to capitalize. It currently ranks at #11, so has enough room to move higher before the market cap looks stretched.
Overall, we’d be buyers of SHIB at current levels based on the technical break just seen, but warrant caution based on the fact that the above points are assumptive and not guaranteed.
AlphaPicks owns coins of Shiba Inu. To trade crypto, register here with our preferred provider, EToro.