The Shiba Inu price has crashed sharply in recent days as it continues to underperform other popular cryptocurrencies. SHIB, the popular meme coin, was trading at $0.00002433, down 43% from its highest level this year. Here are some reasons why the coin will bounce back soon.
Shiba Inu formed three bullish patterns
The most important reason why Shiba Inu price will rebound in the coming days is because it has formed several very bullish patterns.
First, as shown in the chart below, the coin has formed a bullish pennant pattern depicted in blue. This pattern is characterized by a long pole and a symmetrical triangle. This trend is now approaching its confluence level, which suggests further gains in the coming days.
Second, the Shiba Inu token has formed a mini cup and handle pattern with the upper side at $0.00002942. In price action analysis, this is one of the most popular continuation signs in the market. The triangular section of the flag is part of the handle section,
Therefore, the coin is likely to experience a bullish breakout as bulls aim for the yearly high of $0.000045. This price, which is about 87% above current levels, is the upper end of the larger cup and handle model.
Third, the coin moved between the lower support and the first support of the Andrew Fork Indicator, pointing to greater upside potential. The Market Value to Realized Value (MVRV) indicator has also been pointing down, meaning it is being reset.
SHIB Token Burns and More Catalysts
The other reason why the Shiba Inu price is seeing more rise in the coming days is that the ecosystem is doing well. For example, data by Lama DeFi shows that the total value locked (TVL) in the ShibaSwap ecosystem has reached an all-time high of $4.36 million. Most of this volume is in ShibaSwap, WoofSwap and ChewySwap.
Second, the number of Shiba Inu tokens being burned has increased over the past few months, reducing the number of coins in circulation. More than 410 million coins have been burned since its creation and this trend will continue.
Shiba Inu token burns occur voluntarily and from its app ecosystem. For example, Shibarium and ShibaSwap transaction fees are transformed from BONE to SHIB and then burned.
Furthermore, the SHIB Price will rebound because we are in a crypto bull run. Historically, bull runs tend to experience substantial pullbacks as some traders begin to take profits. Therefore, the next rebound will likely attract more investors, afraid of missing out. Remember, a Santa rally could be happening in stocks and cryptocurrencies in the coming months.