Shiba Inu’s price has crashed hard in the past few days as it continued to underperform other popular cryptocurrencies. SHIB, the popular meme coin, was trading at $0.00002433, down by 43% from its highest level this year. Here are a few reasons why the coin will bounce back soon.
Shiba Inu has formed three bullish patterns
The most important reason why the Shiba Inu price will bounce back in the coming days is that it has formed several highly bullish patterns.
First, as shown in the chart below, the coin has formed a bullish pennant pattern represented in blue. This pattern is characterized by a long pole and a symmetrical triangle. This pattern is now nearing its confluence level, pointing to more gains in the coming days.
Second, the Shiba Inu token has formed a mini cup and handle pattern whose upper side is at $0.00002942. In price action analysis, this is one of the most popular continuation signs in the market. The triangle section of the pennant is part of the handle section,
Therefore, there is a likelihood that the coin will have a bullish breakout as bulls target the year-to-date high of $0.000045. This price, which is about 87% above the current level, is the upper side of the bigger cup and handle pattern.
Third, the coin has moved between the lower and first support of Andrew’s pitchfork indicator, pointing to more upside. The Market Value to Realized Value (MVRV) indicator has also pointed downwards, meaning that it is having a reset.
SHIB token burns and more catalysts
The other reason why the Shiba Inu price has more upside in the coming days is that the ecosystem is doing well. For example, data by DeFi Llama shows that the total value locked (TVL) in the ShibaSwap ecosystem jumped to a record high of $4.36 million. Most of this volume is in ShibaSwap, WoofSwap, and ChewySwap.
Second, the amount of Shiba Inu tokens being burned has increased in the past few months, reducing the number of coins in circulation. Over 410 million coins have been burned since inception and this trend will continue.
Shiba Inu’s token burns happen voluntarily and from its ecosystem of applications. For example, transaction fees from Shibarium and ShibaSwap are transformed from BONE to SHIB and then burned.
Further, the SHIB price will bounce back because we are in a crypto bull run. Historically, bull runs tend to have substantial pullbacks as some traders start to take profits. Therefore, the next rebound will likely attract more investors amid fear of missing out. Remember, a Santa Claus rally could happen in stocks and crypto in the next few months.
