Disclaimer: The information presented does not constitute financial, investment, trading or any other type of advice and solely represents the opinion of the author
- The short-term market structure favored the bulls
- Buyers can wait for a drop in an area of interest marked on the charts before buying
Meme coin rallies sometimes mark the final days of a crypto market uptrend and local spike. This happened in late October when Shiba Inu [SHIB] rose nearly 55% to a swing high before quickly falling 23% on October 29-30. Back then Bitcoin was [BTC] was rejected at the $20.8K resistance and fell to $20.1K.
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This time around, both BTC and SHIB have posted gains of nearly 23.5% since Jan. 8, and Bitcoin hit the same resistance level at $20.8K. SHIB has only kept pace with BTC so far. If Bitcoin can consolidate for a few days, there could be time for money to flow into altcoins and Shiba Inu can start another big run to the upside.
The former resistance zone is likely to be tested again
Source: SHIB/USDT on TradingView
In the last two trading days, Shiba Inu managed to rally up to the $0.000011 level and has been declining ever since. It saw a large candlestick south on Jan 14 falling to $0.00000957. Based on the price action, it was likely that this wick would be filled, meaning SHIB would push this low one more time.
Meanwhile, technical indicators showed strong upward pressure. The Chaikin Money Flow (CMF) was well above +0.05 to show significant capital flow into the market and the Relative Strength Index (RSI) was near 60 to signal some significant bullish momentum.
The four-hour chart showed that the $0.0000095 to $0.0000097 area was of interest. The move above this zone on December 5th was quickly reversed, suggesting that it was a hunt for liquidity. However, this time it could be different.
How much are 100 SHIBs worth today?
For starters, there was the Bitcoin bull market. Filling in the inefficiency left behind, BTC retested a bearish order block at $21.2k and a pullback to $19k-$19.5k was not unlikely. This could be accompanied by a SHIB dip into the $0.0000095 area of interest.
Such a decline would likely present buying opportunities. Traders can look for signs of a trend reversal on shorter timeframes to enter long positions.
Rising OI showed bullish intentions, but some long positions were also eliminated in the recent bear market
Source: Coinalyze
SHIB’s market structure remained bullish over the four-hour period. It would take a SHIB dip below $0.00000915 to reverse this bias. During the coin’s rally, OI also shot higher. This was a sign that money was flowing into the market and indicated a strong bullish intent.
The move higher also liquidated short positions in a larger volume than any price action since the Nov. 9 decline. This flagged it as a significant move higher and showed that dips are to buy. A surge in long liquidations is something bulls can watch as it could signal that Shiba Inu is ready to move higher once more.
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