ShibaSwap

The sharp upside retracement surfaces as retail frenzy around Shiba Inu hints at testing May peak levels.

Shiba Inu (SHIB) kickstarted its new weekly session in the green as it continued its bullish retracement move from last week’s low of $0.00002058.

SHIB’s price logged an intraday high of $0.00002907 on Oct. 11, netting over 40% returns from its ongoing rebound trend. In doing so, the Dogecoin-inspired meme cryptocurrency eyed an extended runup toward its technical resistance level near $0.00002978, as shown in the chart below.

Extended rally ahead?

The Shiba Inu chart also showed traders’ intention to accumulate SHIB tokens when its price tests the 20-4H exponential moving average (20-4H EMA; the green wave) as support.

For instance, the cryptocurrency crashed by over 40% on Thursday as Shiba Inu’s addresses worth 1 million–10 million SHIB dumped over 31 billion tokens, the largest in six months, as per Santiment data. However, the price recovered as traders started accumulating SHIB tokens near the 20-4H EMA.

Additionally, Shiba Inu’s ongoing retracement took cues from a potential correlation between the 1million–10 million SHIB address dump and its price. Santiment noted that Shiba Inu’s price rebounds every time after SHIB millionaires dump their holdings, as shown in the chart below.

That shows micro traders’ intention to absorb massive selloffs. 

Retail sentiment moons

The bullish retracement in the SHIB market coincided with a rising number of internet queries for the keyword “Shiba Inu,” as per Google Trends. 

Web data shows a rise in the Shiba Inu trend in the United States on a 12-month interest timeframe, signaling booming retail interest. At 92, the trend is closer to the peak popularity score of 100, last seen in the second week of May. It indicates that more internet users are looking for information on Shiba Inu. 

Nevertheless, the internet queries for the keyword “how to buy Shiba Inu” came out to be only 18 in the same period. Nonetheless, compared to the previous week, the interest shot up by 260%.

Tale of two indicators

On a technical front, SHIB’s latest rebound move appears to have invalidated a bearish setup that Cointelegraph discussed in one of its previous coverages.

Related: Shiba Inu is now a top-20 cryptocurrency with SHIB price soaring 300% in 9 days

Specifically, SHIB’s price broke bullish out of an otherwise bearish descending triangle pattern as it closed above the structure’s upper trendline with a rise in trading volume. While the breakout still awaits confirmation, it has boosted the prospects of bullish continuation.

The reason for an extended upside is a makeshift bull pennant, which typically sends the price higher by as much as the height of the previous upside move. In other words, SHIB’s breakout above its bull pennant pattern could send its price to $0.00004713.

Meanwhile, should the price slip back inside the pennant range, it would risk reactivating the descending triangle setup. In doing so, SHIB may eye a correction toward $0.00002195, followed by a negative breakout move toward $0.00001000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The Dogecoin spinoff sprinted past popular blockchain protocols like Stellar and Polygon to become an $11 billion crypto project.

The run-up in the price of Shiba Inu (SHIB) so far in October pushed the SHIB token to become the 20th largest digital asset by market capitalization.

Shiba Inu's circulating market valuation jumped to $11.08 billion earlier this week and is currently above $10 billion, putting it in the top-20 by market cap for the first time. As a result, the Dogecoin-inspired meme cryptocurrency became more valuable than popular blockchain projects like Stellar (XLM), Polygon (MATIC), and Tron (TRX).

The growth in Shiba Inu's valuation came on the heels of a tweet published by Elon Musk. On Oct 4, the Tesla CEO posted the picture of his pet dog—a Shiba Inu breed—with the caption "Floki Frunkpuppy." SHIB jumped by more than 40% an hour after the tweet.

Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf

— Elon Musk (@elonmusk) October 4, 2021

Crypto speculators tend to read too much into Musk's tweets. For example, the billionaire entrepreneur was instrumental in pushing Dogecoin (DOGE) price higher earlier in 2021 via Twitter.

SHIB price surged by almost 400% a week after opening the fourth quarter of 2021 at $0.00000725. In doing so, the token retested its five-month high of $0.00003528 on Oct 7.

Nevertheless, SHIB underwent a 40%-plus price correction on the same date as some traders decided to unwind their spot positions for interim profits. As a result, Shiba Inu's market cap fell in tandem, going to as low as $8.06 billion on Friday.

The sell-off across Shiba Inu markets (against the dollar and Bitcoin) prompted buy-the-dip sentiment. A rebound rally ensued, which pushed the SHIB price up by more than 45%. At its highest on Saturday, the token was changing hands for $0.00003020, with its market cap around $10.73 billion.

What is next for SHIB?

Shiba Inu price dropped on Oct. 9 by more than 5% to reach a fresh intraday low of  $0.00002575. In doing so, the cryptocurrency hinted at forming a potential descending triangle pattern, suggesting additional losses ahead.

Related: 'Much ow' ahead? Dogecoin chart fractal puts Shiba Inu's 390% QTD rally in danger

In detail, Descending Triangles are typically bearish patterns that form when the price trends lower while fluctuating between an area defined by two converging trendlines: one falling and the other, horizontal, such as the ones SHIB has formed in the chart below.

The formation of lower highs atop a standstill support line indicates weakening buying sentiment among traders. As a result, the price ultimately tends to break below the horizontal trendline. In doing so, its target shifts to a level at a length equal to the maximum Triangle height. 

In other words, SHIB price may go under $0.00001000 in the coming sessions if the abovementioned support level fails to hold.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.