Can this recovery signal lead to a 15% bounce for Shiba Inu price?
- Shiba Inu price has crashed 31% in the last four days as the crypto markets took a tumble.
- This downswing has created a bullish divergence, suggesting a potential for recovery.
- A decisive daily candlestick close below $0.0000071 will invalidate the recovery thesis.
Shiba Inu price has been stuck producing lower lows since October 28, 2021. The market conditions worsened as the LUNA-UST peg fell apart in May 2022 and the most recent crash was caused by a string of events.
However, SHIB seems to be showing signs of recovery following in Bitcoin’s footsteps.
Shiba Inu price hesitates for recovery
Shiba Inu price has shed roughly 66% in the last 40 days with a 40% crash happening in the last two weeks. This move set a swing low at $0.0000073, which is a lower low relative to the one created on May 12 at $0.0000087.
While the lower low formation might not breathe a sigh of relief or recovery, BTC’s bounce of 6.5% in the last two hours signals that a potential recovery rally seems to be in place. As a result, SHIB has gained 11% since its swing low formation at $0.0000073.
Interestingly, the Relative Strength Index (RSI) has formed higher lows on May 12 and June 14, signaling a bullish divergence. This technical formation indicates that the momentum is rising while the asset’s market value is decreasing, which often resolves in a rally.
For Shiba Inu, investors can expect SHIB to continue this recovery rally to retest the $0.0000095 hurdle. In total, this move would constitute a 15% ascent from the current position at $0.0000082.
SHIB/USDT 4-hour chart
Supporting this recovery rally thesis for SHIB is IntoTheBlock’s Global In/Out of the Money (GIOM) model, which shows that the immediate resistance level is relatively weak. This index also shows that if bulls persists, they have a freeway up to $0.0000090. Here, roughly 116,300 addresses that purchased 73.91 trillion SHIB tokens at an average price of $0.0000110 are underwater.
Therefore, a spike in buying pressure could sustain a spike to the target forecasted from a technical standpoint - $0.0000095.
SHIB GIOM
While things are looking up for Shiba Inu price due to Bitcoin’s recovery, it is heavily reliant on the big crypto’s performance. Therefore, if BTC continues to tank, SHIB will likely follow suit. In such a case, if Shiba Inu price produces a daily candlestick close below the $0.0000071 support level, it will invalidate the recovery thesis.
This development will see SHIB plummet further and revisit the $0.0000060 support level.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
