Is Shiba Inu overheating after SHIB price gains 75% in two weeks?

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On Monday, the value of Memcoin rose to $ 0.00002961, the best level since January 18, amid renewed buying interest in the cryptocurrency market. Prior to the return, SHIB collapsed by about 80% from a high of $ 0.00008,770.

However, the rapid rise in prices was also close to triggering classic sales signals. First, the Daily Relative Strength Index (RSI) shows SHIB, a technical indicator ranging from 0 to 100, to indicate whether an asset is overbought (RSI> 70) or oversold (RSI <30), an overbought condition. About after increasing to 60. Finally, the daily Relative Volatility Index (RVI) SHIB, which measures the standard deviation at high and low prices, fell below 50, a sell signal. In the "ideal" scenario, traders exit their long positions after the RVI indicator falls below 40. At the time of writing, it is close to 48. Daily SHIB / USD chart showing RSI and RVI signals. Source: Trading View Additional bearish signals Additional signals of a possible SHIB price correction came from three other technical indicators. First, the current bullish momentum of the Shiba Inu coin shows signs of weakness around the 50-day EMA (50-day EMA; red wave in the chart below) at $ 0.00002761. Second, the current upward trend of SHIB was accompanied by low trading volumes, ie it did not approach the volumes observed during the increase in the price of the coin in October 2021. sales orders. at desired levels. As a result, a market with low liquidity is exposed to sharp price fluctuations in both directions. Daily SHIB / USD chart. Source: Trading View Finally, the SHIB price approached a large retracement level of $ 0.000003358, which coincided with the 0.618 Fibonacci retracement line drawn from the $ 0.00000507 swing to $ 0.00007971. Combined with the alarming RSI and RVI readings, the $ 0.00003358 level represents an ideal breakout zone for traders looking to make temporary gains. Do you miss a SHIB career? Norrock, an independent market analyst, wrote that the recent SHIB price increase showed "excellent short selling opportunities". He quoted a fractal from November 2021 which showed that SHIB experienced a fictitious retracement of about 42% in two days, but later followed with 70%. Daily SHIB / USD chart. Source: Noroc, TradingView Far from being a breath of fresh air for hypium owners, each rally provided great short opportunities for several months, Norrock explained, adding: "This is a clear withdrawal to test and limit resistance and a good opportunity to increase sales when profits were taken in early January." The data comes as bearish positions lost millions of dollars during the recent rise in SHIB prices. For example, data from Coinglass showed $ 10 billion in trade liquidations of Shiba Inu-backed investment products, of which about 75% were short entries. However, Binance's 1000 SHIB futures product, which has 1000 Shiba Inu tokens per contract, looked a bit bearish with a long / short ratio of 0.93 on the adjusted 24-hour time frame. In detail, the buy / sell ratio is the number of net open long positions compared to net open short positions. A reading above 1 indicates that most positions in the open market tend to have a long slope. Conversely, a value less than 1 indicates that the market is currently biased towards short positions.

Source: CoinTelegraph

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