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Shiba Inu price drops 33% from December highs but signals of a potential rebound emerge
Shiba Inu (SHIB), the second-biggest meme coin, rose to a high of $0.00002215, up 12% from its lowest swing this week. It has lagged behind other popular meme coins like Fartcoin, ai16z, and Dogwifhat.
A likely reason for SHIB’s underperformance is that Shibarium, its layer-2 network, is not doing well. While the number of transactions is nearing the 800 million milestone, total transaction fees have continued to decline. On Tuesday, the network collected 640 BONE in fees, valued at less than $300
Shibarium’s performance has impacted Shiba Inu because part of the transaction fees is used to burn SHIB tokens. According to Shibburn, the burn rate has remained under pressure in recent weeks.
Fundamentally, the coin could stage a strong comeback as cryptocurrencies rally. Bitcoin (BTC) is nearing the key resistance point at $100,000 after the encouraging consumer inflation data. It may also do well ahead of Donald Trump’s inauguration and the start of Paul Atkins era at the Securities and Exchange Commission.
Shiba Inu coin price analysis
The daily chart shows that the SHIB price formed a hammer or morning star candlestick as cryptocurrencies dived on Monday. This pattern, featuring a long lower shadow and a small body, is often seen as a reversal sign.
Shiba Inu has also formed a falling wedge chart pattern, made up of two falling and converging trendlines. This pattern is generally considered a bullish reversal signal, with breakouts often occurring as the lines converge.
SHIB has also formed a bullish divergence as the Relative Strength Index has formed an ascending channel. Therefore, the coin may bounce back and reach last year’s high of $0.000033, which is about 50% above the current level. A drop below the key support at $0.00001853, its lowest level in December, will invalidate the bullish view.
This article first appeared at crypto.news
