Shiba Inu's price has significantly declined this year, resulting in billions lost in value while mirroring trends across the altcoin market. This article explores four key factors that may contribute to SHIB's recovery.
Double-Bottom Pattern
One major reason for potential upside is the formation of a double-bottom pattern on the daily chart. This is a common bullish reversal setup characterized by two distinct lows and a neckline, which in SHIB's case is at $0.00001755.
As long as the token remains above the support at $0.00001035, the bullish structure remains intact. A confirmed breakout above the neckline could open the door to further gains. However, a break below $0.00001035 would invalidate this pattern and likely signal more downside.
Falling Supply on Exchanges
There are signs that investors are no longer dumping their tokens as evidenced by exchange inflow and outflow data. The volume of tokens on exchanges has dropped to 140.38 trillion, down from the 30-day high of 141 trillion.
This shift suggests that investors, particularly whales, are holding rather than selling. The supply held by whales has remained stable at around 709 trillion SHIB over the past few months.
Rising Futures Open Interest
Another bullish indicator is the rise in SHIB futures open interest, which suggests growing demand among traders. Open interest climbed to $59.2 million on July 2, up from last month’s low of $52 million. Historically, rising open interest often precedes price rallies in crypto.
In line with this, the funding rate has turned positive, signaling that investors believe that the price will be higher in the future than it is today.
Shiba Inu's price could recover due to a combination of factors including technical patterns on charts, behavioral shifts among investors, and potential positive changes in the broader cryptocurrency market. These aspects will be closely monitored in the upcoming months.
