Shiba Inu: Why a short-term SHIB rally may follow 15% drop
The 1-month liquidation heatmap showed that there was a dense cluster of short liquidations just below $0.000008 that could drag prices higher in the coming days.
Shiba Inu [SHIB] has the potential to hunt the imbalances left behind during its price move downward, reported AMBCrypto two weeks ago. This medium-term outlook remained unchanged.
The recent SHIB pullback from the local high to a local low measured 15.59% in under five days. While this appeared to signal that further losses were likely, it could be a positive, healthy short-term development.
The on-chain metrics reflected accumulation, and the threat from profit-taking has not been significant. The metrics pointed toward possible short-term gains, in agreement with the imbalances from earlier this month.
The imbalances highlighted on the daily timeframe lined up well with the $0.00000758 and $0.00000817 retracement levels (white). The final upward target was $0.00009, before the longer-term downtrend resumes.
Traders should remember the longer-term bias but can also expect short-term gains, despite the past weeks’ losses.
Why the recent pullback was healthy for SHIB
A bullish structure shift (green) occurred on Saturday, the 14th of February. The local high and the subsequent pullback were already covered, but the H4 context made for better reading.
The internal bullish structure on the 4-hour timeframe remained intact. Additionally, the strong bullish reaction from the $0.0000062 area in recent days confirmed short-term bullishness.
It was likely that Shiba Inu prices could rally as far north as $0.00000818, the 61.8% extension level on H4 and a higher timeframe supply zone, by next week.
The OBV was steadily rising. A breakout past the $0.0000066 supply zone from the 16th of February would be an encouraging sight for buyers.
The 1-month liquidation heatmap showed that there was a dense cluster of short liquidations just below $0.000008. This lined up well with the H4 extension targets and the 1-day imbalance highlighted earlier this month.
Therefore, traders can expect short-term SHIB gains. Long-term holders are likely to sell into this bounce, making it extra-important for traders to take profits once prices reach their targets.
Final Summary
- The confluence of the 1-day timeframe’s imbalances and the H4 structure’s extension levels presented clear upside price targets.
- The defense of the $0.0000062 demand zone was a good start for the bulls. Their immediate goal would be to overcome the $0.0000066 local supply zone.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
