After a long period of correction and accumulation, Shiba Inu (SHIB) may be preparing for a strong bullish breakout. This comes after the Federal Reserve cut interest rates, which has boosted the cryptocurrency's price.
As this Meme Coin prepares for a major jump, this analysis explores the factors behind the revised prediction and what traders should keep in mind.
Shiba Inu Creates Opportunities, Boosts Traders' Confidence
Two weeks ago, SHIB was trading at $0.000012 amid concerns about capitulation. However, the price has risen to $0.000014, thanks to the Federal Open Market Committee (FOMC) decision to cut interest rates by 50 basis points.
With SHIB trading at $0.000012, the deviation between price and daily active addresses (DAA) is a negative signal. This on-chain metric is important for identifying potential entry and exit points in the market. A negative price-DAA deviation indicates low user participation on the blockchain, suggesting that the price increase may not be sustainable as network activity is insufficient to sustain the trend.
However, as seen below, the price-DAA skewness of Shiba Inu has turned positive at 15.90%. This shows that the recent uptrend is supported by increased network activity. Therefore, SHIB still presents a buying opportunity as the price could fluctuate higher than current levels.
Speaking of SHIB’s future potential, Coinglass data shows an increase in derivatives trading volume. Previously, both the spot and derivatives markets showed low activity, reflecting limited interest in the token.
As volume increases, there is a clear shift in the Funding Rate, an indicator of trader sentiment. A negative Funding Rate typically indicates that most traders are holding short positions. However, at the moment, the ratio has turned positive, suggesting that traders are now expecting further price increases and are backing this outlook with long positions.
SHIB Price Prediction: Bullish Breakout Is Coming
To provide a clearer view of the SHIB price prediction, BeInCrypto analyzed the weekly chart. According to the analysis, the Meme Coin has formed a falling wedge pattern, starting from its yearly high in March when the price hit $0.000032.
The falling wedge pattern is a bullish technical pattern formed by a series of downward sloping lows and highs. Based on the image below, buyers are starting to step in and take advantage of seller exhaustion.
If this continues, the SHIB price may not drop to $0.000010. Instead, the token could break the resistance around $0.000015 and rally 40% to $0.000019, which could happen in the first few months of the last quarter of 2024.
However, if sellers neutralize the buyers' newly found control, this prediction could be invalidated. If that happens, SHIB could drop to $0.000010.
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