SHIBA INU TAKING ITS TIME TO COOL OFF AFTER SUPERB OCTOBER
After an incredible previous month in terms of dollar value growth (roughly +900%), the most controversial cryptocurrency in the market history, Shiba Inu (SHIB/USDT) is failing to live up to expectations of many new investors especially those who bought in the asset after the 27th of October hoping that a vertical movement to the upside would continue. Realistically that was always highly unlikely because, by right, such explosive pumps always end sooner rather than later and in this case SHIB's market capitalization had already reached an overly inflated size for what the blockchain does in my opinion.
And it still doesn't do a whole lot apart from playing a role of a fantasy for inexperienced newcomers. If you are into crypto in any shape or form, you must have heard or read a story of a guy who had bought $8000 worth of Shiba Inu stock and right now is apparently filthy rich. Now there is nothing worse than killing people's dreams but here at cryptodaily.co.uk we are not in a business of selling irrational hopes either, instead we try to prevent people from making basic & obvious financial mistakes in these ocassionally insane markets. That's why in my previous article on SHIB last month I made a point of warning our least experienced readers that the $0.01 price would never come into existence based on market cap limitations.
And I will repeat that again: for the value of this memecoin to reach one cent, its capitalization would have to increase by a factor of 181 from its current state. It's really simple maths: $0.01 divided by 0.00005523 equals 181. Let's say all the circulating tokens are worth $30B in total at the moment of writing this piece (according to coingecko.com and coinmarketcap.com). I checked both sources to make sure since even that figure is pretty controversial, but let us use the $30B, then we need to multiply this by 181 and the result we get is... $5.43 Trillion. For the 1 cent Shiba Inu fantasy to come true, this memecoin would have to become almost twice as large as the total market cap of all crypto combined. If one still doesn't comprehend how truly ridiculous this is, there surely is no more hope for them.
All of the above doesn't necessarily mean that the token cannot and will not keep growing and even remove another zero, which would mean doubling of its current price. It definitely could and there are enough 'believers' to push this thing higher during this accelerating bull run without a shadow of a doubt. Unless a sudden sell-off from one of the whales happens and that could be brutal since allegedly 10 of the biggest holders are controlling over 70% of the circulating supply. Some claim it's actually 8 whales controlling the 72%, but the point still stands as far as I'm concerned, it's way too concentrated in the top wallets.
Generally, the coin's main strenght seems to be the all-important Network Effect since SHIB is able to boast over 931k wallets and that number has been steadily growing too. Not only that, but also in terms of online communities such as facebook groups for instance, these are absolutely the most numerous and active communities that I have ever come across in crypto. Members are also very well organized and we could see a prime example when over half a million (!) of Shiba Inu enthusiasts signed a petition at Change.org requesting of Robin Hood to finally list their favoured asset on its trading platform. Farther hundreds of thousands of the memecoin's fans aditionally signed online petitions asking Tesla and Amazon to accept the token as a method of payment for goods and services. These SHIBA people are 'soldiers' and they are willing to 'fight' for their beloved asset for sure.
Moving on to the charts, Shiba Inu is at-present trading at $0.0000551 which means the price is roughly 38% below the ATH level of $0.00008854 set on the 28th of October. Obviously the coin has been in a steady downtrend for two weeks now, but that was to be fully expected after such impressive growth and especially this past month during which Shiba Inu (SHIB/USDT) all of a sudden had become a TOP 10 crypto (11th largest cryptoasset as of today). It's actually rather difficult to draw any conclusions based on the charts right now since we don't have enough previous history in respect of price action but let's try to at least figure out what phase of an dowtrend are we in at this moment.
So, the Stochastic is approaching an oversold territory on the daily as well as on the 4-hrly pointing to a potential reversal of the latest decline in the price of SHIB. The descending triangle that I have drawn in the chart should be breaking down today or tommorow but I'm frankly not 100% convinced that this is the pattern that is going to determine the direction of price movement in the coming days/weeks – we will be wiser if the breakout backed by rising volume occurs. The volume of trading has been drastically falling especially compared to what we dealt with two weeks ago when the token was rallying up on its way to break the current ATH.
Presently we are below all the important MAs: 20, 50 and 100 day so getting back above them remains a priority if we are to start talking about reversing the ongoing trend. There is not much more worth talking about for now, albeit if the price does break to the upside from this triangle, we might see an explosive move of at least 33%. Not as crazy as whatever the SHIB investors would like to see, but still better than a farther pullback. Good luck and Happy Investing (or should I say, gambling).
Disclaimer: This trading analysis is provided by a third party, and for informational purposes only. It does not reflect the views of Crypto Daily, nor is it intended to be used as legal, tax, investment, or financial advice.