SHIB Price Poised for Correction in Spite of 10% Surge in October
In October, the price of Shiba Inu (SHIB) experienced a 10% increase, leading many to believe that the token’s rally would continue. However, this sentiment seems to have shifted as November began. Currently, SHIB is valued at $0.000018, and there are several reasons why its price could potentially decrease in the coming weeks.
One factor to consider is the decrease in investor interaction with Shiba Inu. Throughout most of last month, the Daily Active Addresses (DAA) divergence for SHIB remained positive, indicating steady price growth and increased user engagement. When both the price and DAA rise together, it suggests that active user involvement is supporting the price trend. However, recent data from Santiment shows a 20% drop in the price DAA divergence, signaling a decline in active addresses interacting with SHIB. Historically, this trend has been associated with price drops, and if this decrease in DAA continues, Shiba Inu may face further declines, potentially testing support levels below $0.000018.
Additionally, on-chain data from IntoTheBlock reveals a decrease in Shiba Inu’s Coins Holding Time in the past week. This metric reflects the average duration that SHIB coins are held before being sold. A decline in Coins Holding Time suggests that investors are becoming more active in selling rather than holding onto their SHIB coins for longer periods. This could be interpreted as a sign of weakening investor confidence, as holders might be seeking to liquidate their positions due to a perceived lack of upward momentum. Coupled with the drop in active addresses, this pattern could exert further downward pressure on SHIB’s price.
Looking at the daily chart, SHIB’s price broke out of a descending triangle pattern on October 29, which is typically seen as a bullish signal indicating a potential upward trend. However, the price has since fallen back into the descending triangle pattern, suggesting that the initial breakout surge might have been a fakeout. A fakeout occurs when the price briefly surpasses a resistance level or pattern before quickly reversing, trapping buyers who expected further gains. Furthermore, the Relative Strength Index (RSI) reading has also decreased, pointing to a decline in bullish momentum.
As it stands, there is a possibility that the price could decline to $0.000015, leading to potential losses for SHIB investors. However, if the token manages to rise above the triangle pattern once again, its value may climb to $0.000022.
Despite the 10% hike in October, there are several indicators suggesting that SHIB is likely bound for a correction in the near future. SHIB investors should be prepared for potential losses and closely monitor these market dynamics.