Shiba Inu Surge Signals Possible Comeback: Tech and On-Chain Analysis

Shiba Inu's recovery prospects have improved as it regains a crucial support zone from mid-March, buoyed by increased buying pressure. Despite Shiba Inu's recent downward trend, Bitcoin's range-bound trading and consolidation signs indicate potential volatility for altcoins, creating a favorable environment for Shiba Inu's potential resurgence.

Shiba Inu's Resurgence: Technical and On-Chain Analysis Reveals Potential Recovery

Market Overview

Shiba Inu [SHIB], a prominent cryptocurrency known for its Dogecoin-inspired origins, has experienced a recent resurgence, reclaiming a critical support zone established in mid-March. This surge in buying pressure suggests the potential for a broader recovery in the coming days.

Technical Analysis

On the 12-hour chart, SHIB's market structure appears bullish, with the recent pullback creating a bearish internal structure. The token has faced resistance at the 50% Fibonacci retracement level, hindering a sustained recovery.

However, if SHIB can overcome these resistance levels of $0.0000275 and $0.0000295, it would indicate a shift in momentum in favor of the bulls. The Chaikin Money Flow (CMF) indicator suggests significant capital inflow and buying pressure, while the Relative Strength Index (RSI) has recently climbed above the neutral 50 level.

On-Chain Analysis

A deeper dive into on-chain metrics provides further insights into SHIB's recent performance. The 30-day Market Value to Realized Value (MVRV) ratio, which measures the average profit or loss of SHIB holders, has remained negative for most of April, indicating holders are currently at a loss.

However, the mean coin age, which measures the average age of SHIB coins held by investors, has trended upwards in the past six weeks. This, coupled with the MVRV, suggests a positive buying opportunity for investors. Additionally, the Weighted Sentiment, which gauges market sentiment towards SHIB, has turned positive in recent days, highlighting a shift in sentiment in favor of the bulls.

Market Dynamics

Shiba Inu's recent performance has been influenced by several factors, including the reduced correlation between SHIB and Bitcoin [BTC]. With BTC trading within a range and showing signs of consolidation after its recent halving event, altcoins like SHIB could experience increased volatility in the near future.

While the short-term technical outlook for SHIB remains bearish, traders should be vigilant for a potential move higher. The current surge in buying pressure could indicate the start of a recovery phase, particularly if the token can break through the aforementioned resistance levels.

Conclusion

Shiba Inu's recent performance suggests the potential for a recovery in the near future. Technical and on-chain analysis provide indications of buying pressure and positive sentiment, while the reduced correlation with Bitcoin could contribute to increased volatility. Traders should closely monitor the token's performance and be prepared for potential market movements in either direction.