Shiba Inu (SHIB) Has Been Experiencing Mixed Signals

SHIB has made attempts to secure a breakout, but this effort hinges heavily on investor support. This support has been weak recently, forcing SHIB to rely on the broader market

Shiba Inu (SHIB) has been displaying mixed signals in recent weeks as it attempts to secure a breakout from its current consolidation phase. However, this effort hinges heavily on investor support, which has been relatively weak. As a result, the meme coin’s price movements are closely tied to the broader market trends, especially Bitcoin (BTC).

If Bitcoin continues its upward trajectory, it could provide the necessary momentum for Shiba Inu to stage a recovery rally. This potential rally would be fueled by Bitcoin’s surging past the $90,000 mark and continuing its ascent in the latter half of 2024.

Bitcoin’s breach of the $90,000 level would instill further confidence in the cryptocurrency market, which, in turn, could help lift Shiba Inu from its current consolidation phase, giving it the momentum needed to push past key resistance levels.

However, if Bitcoin stalls and begins to slide, it could exert pressure on Shiba Inu, forcing it lower. A slip back toward the $60,000 to $70,000 range for Bitcoin would likely drag Shiba Inu back into the lower support zone at $0.00001141.

Shiba Inu Needs Support

The MVRV Long/Short Difference for Shiba Inu is currently at a 6-month low, a key indicator suggesting that short-term holders are experiencing substantial profits. This is a bearish sign for the cryptocurrency, as these investors are typically more inclined to sell when they are in profit.

As a result, the potential for a sell-off is higher, and the price of Shiba Inu could take a hit as these holders exit their positions. This behavior could put downward pressure on SHIB, limiting its chances of maintaining or building upon its recent gains.

The lack of strong support from long-term holders, combined with the large profit-taking from short-term traders, creates an unstable market dynamic for Shiba Inu at present.

Shiba Inu’s correlation with Bitcoin remains strong, currently sitting at 0.77. This indicates that SHIB tends to move in tandem with Bitcoin, and as the largest cryptocurrency gradually recovers, Shiba Inu could follow suit.

If Bitcoin continues its upward trajectory and surges past the $90,000 mark, it will likely provide the necessary boost for SHIB to continue its own recovery.

However, if Bitcoin experiences a slip and returns to the lower support zone at $60,000 to $70,000, it could put pressure on Shiba Inu to move lower. In this scenario, SHIB will likely remain consolidated around $0.00001275 or potentially fall to $0.00001141, depending on the strength of the bearish pressure.

The only way this bearish-neutral outlook would be invalidated is if Shiba Inu breaks through the $0.00001462 resistance and flips it into support. A successful rally above this level could pave the way for SHIB to rise to $0.00001676 and beyond, marking the start of a more bullish trend for the meme coin.