Shiba Inu is hoping to become more than just a memecoin inspired by Dogecoin (DOGE) as it nears launching its own Tier 2 network called Shibarium. Meanwhile, the Shiba Inu (SHIB) token has emerged as one of the best performing coins so far in 2023.
Chip rate to rise by 60% in 2023
SHIB price is up almost 60% year-to-date, reaching $0.00001294, the highest price since early November 2022.
Gains are starting to show mainly due to favorable macroeconomic conditions which have led to similar highs in other parts of the cryptocurrency market. However, the Cheparium price hike gained momentum as investors weighed in on the announcement of the upcoming Cheparium beta.
Shibarium is supposedly a layer two network that runs on top of the main Ethereum blockchain. In other words, it will allow developers to build and launch decentralized applications, targeting lower transaction costs and improved network scalability.
SHIB’s price has increased by 25% since January 16, when the Shiba Inu team teased their audience by announcing the launch of Shibarium.
Introduction to Shibarium: Shiba Inu Layer 2 Network – Rejoice #ShibArmy! Cheparium beta is about to be released, and through this article we want to introduce some basic concepts to clarify the community.
Read more: https://t.co/xWyPaVlQQ4
– Shibtoken January 15, 2023
Shiba Inu Price: Another 75% Boom?
The Shiba Inu’s rally has made the asset overbought on the daily time frame, as measured by the Relative Strength Index (RSI) which stood at nearly 86 on January 18th – sixteen points above the overbought threshold of 70.
- Related: What is ShibaSwap and how does it work?
Ideally, an overbought RSI causes investors to liquidate their positions, which leads to a price correction. In other words, SHIB is in danger of declining towards the 200-day exponential moving average, which is represented by the blue line in the chart below, near $0.00001120.
However, in the long term, SHIB price is likely to continue rising if the bullish reversal pattern on the weekly chart is valid.
The pattern, which is called a falling wedge, develops when prices head lower within a range defined by two converging descending trend lines.
It is resolved after the price breaks above the upper trend line towards the level with a length equal to the maximum height of the wedge.
SHIB entered the breakout stage of the falling wedge pattern, as shown below. It is now seeing an extended rally to $0.00002063 in March 2023, up 35% from the current price levels.
Alternatively, a potential bearish scenario would see SHIB fall short of the wedge breakout target if the price reverses from the intermediate resistance level at the 50-day exponential moving average (red line) near $0.00001309.
This downturn could risk sending SHIB price towards the upper trend line of the wedge near $0.00000800, or a 40% drop from the current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should do their own research when making a decision.