- Shiba Inu price is set to drop another 10% this week.
- SHIB price is at risk of breaking below the low of past summer.
- Expect a sharp move lower towards $0.00000655, or 40% devaluation of its current price.
Shiba Inu (SHIB) price has briefly been flirting with the possible start of a bull run, but with bulls dropping the ball due to dollar strength in September, has instead suffered a back-to-school moment. Since the beginning of the month, key levels have been given up, with the biggest at $0.00001209. Another leg lower looks to be granted as the Swedish Riksbank sets the market tone with a supersized 100 bp hike, which, should the Fed do the same on Wednesday, trigger a massive sell-off in cryptocurrencies on the back of even more dollar strength.
SHIB price at risk of Fed squeeze
Shiba Inu price is at the mercy of central banks after markets got rattled today with a surprise 100 bps hike from the Swedish Riksbank. Although Sweden and the SEK have little to do with cryptocurrencies the move has put markets on edge before the Fed policy meeting on Wednesday, and a surprise 100 bps hike from the Fed would be a huge game changer for markets. Massive dollar strength would kick in and trigger an avalanche sell-off in equities and cryptocurrencies.
SHIB price is thus at risk of dropping 10% in the run up to the Fed meeting on Wednesday evening as markets get more nervous that 100 bps could be on the cards. Depending on how Powell delivers his message, expect to see even more dollar strength coming in, pushing the eurodollar back below parity and triggering another sell-off in equities and cryptocurrencies, which will be enough to pressure a break below $0.00000965. From there, another area opens up that could see a drop unwinding towards $0.00000655, adding another 40% losses in the books for 2022.
SHIB/USD Daily chart
The alternative scenario could be that a turnaround occurs should the Fed only deliver a smaller-than-expected rate hike with a dovish message. That would mean a small uptick towards $0.00001209 and a positive return of 11%. That would be as far as the short-term rally would go as the red descending trend line, the historic pivotal level at $0.00001209 and the 55-day Simple Moving Average all reside around that level as caps.
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