Shiba Inu (SHIB) Price Will Bounce Back Soon, Here Are 3 Reasons Why

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

The price of Shiba Inu (CRYPTO: SHIB) has declined sharply over the past few days, lagging behind other popular cryptocurrencies.

On Friday evening, the SHIB price was trading at $0.00002433, which is about 43% below the highest price it has reached this year.

However, several bullish factors could lead to a strong SHIB price rebound in the coming days.

Shiba Inu technical analysis

The most important reason why I expect the Shiba Inu price to bounce back in the coming days is that it has formed several bullish technical patterns.

First, as shown in the chart below, the coin has formed a bullish pennant pattern, which is shown in blue. This pattern consists of a long pole and a symmetrical triangle. The pennant is now approaching its confluence level, indicating further gains in the coming days.

Second, the Shiba Inu token has formed a mini cup and handle pattern, with the upper handle at $0.00002942. In price action analysis, this is one of the most common continuation signals in the market. The triangle portion of the pennant is part of the handle portion.

Therefore, there is a high probability that the coin will experience a bullish breakout as bulls target the highest price of the year at $0.000045. This price, which is about 87% higher than the current price, is the upper portion of the larger cup and handle pattern.

Third, the coin has moved between the lower and first support of the Andrew’s pitchfork indicator, indicating further upside. The Market Value to Realized Value (MVRV) indicator has also declined, indicating that it is resetting.

Shiba Inu token burns and other catalysts

Another reason why I expect the Shiba Inu price to rise in the coming days is the strong performance of its ecosystem.

For instance, data from DeFi Llama shows that the total value locked (TVL) in the ShibaSwap ecosystem surged to a record high of $4.36 million.

The bulk of this volume is in ShibaSwap, WoofSwap, and ChewySwap.

Second, the amount of Shiba Inu tokens burned has increased over the past few months, reducing the number of coins in circulation.

Since its launch, over 410 million coins have been burned and this trend is set to continue.

Shiba Inu’s token burns are voluntary and occur within its application ecosystem.

For instance, transaction fees from Shibarium and ShibaSwap are converted from BONE to SHIB and then burned.

Finally, I expect the SHIB price to bounce back because we are in a crypto bull run.

Historically, bull runs tend to experience significant pullbacks as some traders take profits. Therefore, the next rebound will likely attract more investors for fear of missing out.

Also, in the next few months, both stocks and crypto could experience a Santa Claus rally.