Shiba Inu’s growing correlation with this asset could hinder its recovery
- Shiba Inu is adhering to Bitcoin’s trajectory, which could keep any possibility of a rise subdued.
- The broader market is still in a state of “extreme fear,” which will impact both BTC and SHIB’s recovery.
- Shiba Inu is making progress with its Metaverse, with the reveal of its first WAGMI Temple concept art.
While Dogecoin might be the meme coin king, it is Shiba Inu that is currently the most popular meme token, and it is this popularity that its recovery hinges on since, on a technical level, SHIB is truly struggling.
Bitcoin not to the rescue?
Not really. In fact, it might just be the king coin that stands in the way of recovery for Shiba Inu. Both the assets are following the broader market cues, and the larger sentiment post the August dip is still pretty negative. Investors are in a state of “extreme fear” two weeks later still, which is making a recovery difficult.
Shiba Inu’s downtrend seemingly coming to an end a few days ago was nothing but a fakeout since SHIB returned to its earlier state of decline at the time of writing. Evidence of the same is apparent as per the Parabolic SAR, as the black dots moved back above the candlesticks in the last 42 hours.
The best support SHIB has at the moment is the 50-day Simple Moving Average (blue), which will support its recovery to the market top with a 40% rise. But that could be lost too if SHIB continues declining.
Shiba Inu daily chart
Bitcoin’s price is observing no different momentum as it is still stuck in the critical zone under the 23.6% Fibonacci level. Trading at $18,968, BTC is in the danger zone as it is very close to the market bottom.
Bitcoin 24-hour chart
Why does this matter to Shiba Inu?
The way Bitcoin’s trajectory could affect SHIB is that the latter shares a correlation of 0.61 with BTC. As long as Bitcoin remains subdued, SHIB will be too, and the only saving grace for the meme coin is its demand.
Shiba Inu’s correlation to Bitcoin
Shiba Inu’s most marketable prospect is its Metaverse, which is developing rapidly. Earlier last week, Shiba Inu showcased its first ever WAGMI Temple concept art. The WAGMI Temple is designed as the core of the Metaverse and is set to display Shiba Inu’s history.
Although no discernable effect was observed on the price action from this development, the eventual inclusion of investors in the virtual world will certainly push SHIB on the charts.
Author
Aaryamann Shrivastava
FXStreet
Aaryamann Shrivastava is a Cryptocurrency journalist and market analyst with over 1,000 articles under his name. Graduated with an Honours in Journalism, he has been part of the crypto industry for more than a year now.
