Shiba Inu has gained 10% this week, but can meme coin rallies be trusted?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The near-term market structure remained firmly bullish.
- A breakout past an imminent resistance level could see Shiba Inu post further gains.
Bitcoin [BTC] broke above the $17.6k-$17.8k resistance zone and traded at $18.1k at the time of writing. Even though it faced resistance at $18.2k and $18.6k at press time, the bulls continued to make a strong case for further gains. An inefficiency further north meant a BTC move toward $20k became more likely by the day.
Is your portfolio green? Check the SHIB Profit Calculator
This meant meme coins such as Shiba Inu [SHIB] also saw bullish market sentiment. The coin traded close to a level of resistance from mid-November. The previous breakout past this level was quickly reversed. Can this rally meet the same fate?
Demand has been strong recently and the rally could smash past nearby resistance levels
The RSI on the four-hour chart remained above neutral 50 to show bullish momentum. Meanwhile, the OBV has made a series of higher lows in January. Together, they suggested the bias remained bullish for Shiba Inu.
The market structure was also bullish, but a drop below $0.00000855 would change this bias. In the past couple of days, the $0.0000088 level has been defended as support, which encouraged lower timeframe bulls to bid once more.
How many SHIBs can you get for $1?
The daily chart showed that the $0.00000943 mark was not broken on the previous move above it, back on 5 December. Thus, the daily session close was beneath this level despite the short-term move to $0.00001 on that day. This time, a daily close above the resistance could add to the bullish sentiment.
The Open Interest rises to show bullish momentum drove the market
Data showed Open Interest has been rising swiftly over the past two weeks. The lower timeframe trend has also been bullish since late December. Therefore, participants were willing to bet on further gains, as a rising OI, alongside rising prices, indicated strong bullish sentiment.
In the past few hours, some short positions were liquidated as SHIB bounced from the $0.0000088 mark. The funding rate was also positive and did not show bears were fading this move yet. Hence, a breakout past $0.0000094 and a retest can offer a buying opportunity.