The Shiba Inu price has found no love this year as worries about the cryptocurrency industry remain. The biggest concern is whether these coins will perform better in a period when the Federal Reserve and other central banks are expected to start tightening. It is trading at $0.000028, which is about 68% below the highest level last year.
Federal Reserve concerns
For years, investors have been warned against fighting the Fed. This statement means that it is always unwise to buy assets like stocks when the Federal Reserve has embraced a hawkish tone.
Sadly, we are in that environment. In November last year, the Fed started tapering its asset purchases by reducing the amount of asset purchases by about $15 billion. It then accelerated its tapering in December and hinted that quantitative easing (QE) policies will end in March.
Recently, more Fed officials have warned that the bank will start hiking interest rates this year. Analysts believe that the bank will implement about three to four rate hikes, which will push interest rates to about 1%.
The actions by the Federal Reserve explain why the Shiba Inu price has declined by more than 60% from its highest level last year. It also explains why the total market capitalization of all cryptocurrencies tracked by CoinGecko have declined by over $800 billion in the past few months. Bitcoin’s market value has retreated by billions of dollars.
Shiba Inu and other meme coins like Dogecoin, Dogelon Mars, and Floki Inu have all declined because of the falling demand for these coins. While the number of social media mentions have increased lately, they remain significantly below their highest levels last year.
Shiba Inu price prediction
The daily chart shows that the SHIB price has been in a strong bearish trend in the past few weeks. Along the way, the coin has moved below the 25-day and 50-day moving averages. Similarly, oscillators like the Relative Strength Index (RSI) and MACD have also declined. All these are bearish signs.
However, a closer look at the chart shows that it has formed what looks like a falling wedge pattern. It is shown in black. In price action analysis, a falling wedge pattern is viewed as a bullish sign especially when it is nearing its confluence level.
Therefore, a contrarian case can be made that the Shiba Inu price will make a comeback in the next few days or weeks.
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