Shiba Inu Price Recovers 20%, Why $0.000025 is the Key to SHIB Reversal?

2022/01/26 09:25:40

Shiba Inu continues to trade with a bearish bias at $0.000020, but the crypto coin has recovered over 20% from the $0.000017 low placed on January 22, 2022. Yesterday, SHIB/USDT closed at $0.000021 after placing a high of $0.000023 and a low of $0.000018.

Are you wondering what triggered such a massive recovery? Let's find out below.

Shiba Inu Enters the Metaverse

The Shiba Inu cryptocurrency's official Twitter account has announced a metaverse initiative focusing on the coin's ecology. It will be called "Shiberse" and provide the Shiba Inu community with an "immersive experience."

ShibaSwap creator Eric M. states in a statement posted on the Shiba Inu community's official Discord server. He said Shiberse would be a place where multiple aspects of the Shia Inu ecosystem (tokens, decentralized exchange, games) come together.

Moreover, the name of the metaverse project has not yet been finalized and warned people not to fall victim to scammers. Eric says in another message that metaverses are "here to stay" and that the community is the most crucial aspect of the new initiative.

Developers of Shiba Inu and Coinmarketcap Agree on an Issue

The Shiba Inu developers and the Coinmarketcap issue are also resolved. Both parties reached an agreement to fix the wormhole addresses. Earlier last week, the members of the Shiba Army alerted CoinMarketCap about three wormhole SHIB contract addresses on their official platform.

The Shiba Inu Twitter account also warned that the use of those addresses could be unsafe as they were believed to be fake smart contracts on Binance Smart Chain, Terra, and Solana. However, the tams of Shiba Inu and the world's most referenced crypto price-tracking website, CoinMarketCap, started working together to resolve the issue.

Consequently, Shiba Inu showed a significant recovery of about 40%, but the coin failed to maintain a bullish moment and fell again to trade at $0.000020.

What's Causing a Sell-Off in Shiba Inu (SHIB)?

Shiba's slump can be linked to the current market crash that has lasted several weeks. There was no significant event that could have hurt the prices of SHIB/USD rather than the rising prices of the US dollar. Therefore, the coin followed the overall crypto market sentiment and continued declining.

The rising value of the US dollar, fueled by increased bets on safe-haven demand, added weight to the SHIB/USDT. The safe-haven status of the greenback gathered strength on the back of rising tensions on Ukraine's borders with Russia.

97 Crypto Enforcement Actions by the US SEC

The recent dip in the crypto market can also be associated with aggressive actions by the US Securities and Exchange Commission.

So far, the SEC has taken 97 cryptocurrency enforcement actions. The securities regulator has also fined digital asset market players around $2.35 billion.

Cornerstone Research printed a report titled "SEC Cryptocurrency Enforcement: 2021 Update" last week.

As of December 31, 2021, the SEC had brought 97 enforcement proceedings since July 2013. The report lists 58 cryptocurrency-related lawsuits and 39 administrative measures, and half of the 58 lawsuits were filed in New York. On Jan. 3, 31 lawsuits were settled. It also issued ten late filing orders, 20 trading suspension orders, and several subpoenas and administrative actions.

News and events of this kind drive FUD (Fear, Uncertainty, and Doubt) among investors. Therefore, investors liquidate their crypto holdings and move funds into safe-haven assets such as dollars and gold.

But the good news is that the SHIB/USDT is heading south to retest its crucial support level, and it may offer an excellent buying trade. So let's take a look at the technical side.

Shiba Inu Price Chart on the Daily Timeframe | Source: SHIB/USDT

Shiba Inu Price Analysis - Triangle Breaks Out at $0.000025

At the moment, Shiba Inu is trading with a solid bearish bias at $0.000020. Taking a look at the technical side of the market, the SHIB/USDT has violated the descending triangle. The pattern was extending strong support at the $0.000025 level. The formation of candles below double bottom level $0.000025 validates a breakout.

Typically, a breakout of the triangle pattern results in the continuation of a bearish trend, therefore, SHIB/USDT has the potential to dip until the next $0.00017.

The leading indicators like the RSI (Relative Strength Index) and Stoch RSI hold below 50, indicative of a selling trend. Likewise, the lagging technical indicator, 50 EMA, is holding at $0.000030, supporting a potential downswing in Shiba Inu.

A surge in selling pressure can lead Shiba Inu's price towards the $0.000017 or $0.000011 support levels. Alternatively, a spike in demand at the current level can slice through the SHIB/USDT coin towards 0.000025 or 0.000030. Further on the higher side, the next significant resistance will prevail at 0.000034.

Good luck, fellas. Stay tuned for exciting updates!

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