Shiba Inu Price Analysis: On-Chain Metrics Signal 40% Potential Rally Ahead

Shiba Inu price suffered a steep correction in the August 4 market crash. Despite the following recovery, SHIB struggles to reclaim its previous highs as the market remains fearful. SHIB price dropped by 2.5% on Wednesday as on-chain metrics signal a bullish storm forming. The Shiba Inu chart sports a potential double bottom formation that could turn the tides for the dog-themed meme coin.  

Shiba Inu Price Wants to Break Out

SHIB price chart currently displays a falling channel, suggesting a persistent downward trend. Recently, the price tested the lower boundary of the channel, signaling a potential short-term reversal or continuation of the downtrend depending on the upcoming price action.

The 50-day EMA ($0.00001718) and the 200 EMA ($0.00001855) are the immediate resistance levels, with the latter being stronger due to its long-term significance. The upper boundary of the descending channel, around $0.000015, could also act as resistance. 

On the flip side, the lower boundary of the channel, around $0.000011, provides a key support level. If the price breaks below the channel, the next significant support would be around $0.000008, inferred from previous consolidation levels.

The recent candlesticks near the lower channel boundary suggest a potential double-bottom pattern, a bullish reversal pattern. If confirmed, this could lead to a short-term rally to $0.00001855, and if surpassed, the price may rise higher to $0.00002748. 

The Relative Strength Index (RSI) is at 31.47, near oversold territory. This indicates that the asset might be undervalued in the short term, often a precursor to a bounce or reversal. The Chaikin Money Flow (CMF) is at 0.07, indicating a slight positive money flow, which suggests some buying interest is building.

Shiba Inu price prediction shows that if the price breaks above $0.000014 and closes above the 50-day EMA, it may signal market strength, turning SHIB bullish. The next price target would be around $0.00001855, which is where the 200 EMA resides and also near the upper boundary of the channel.

On-Chain Analysis Support Inbound Rally

Data from Shibarium Scan, the official Shiba Inu Chain explorer, shows New accounts on the network hit a new all-time high on August 6. This signals increasing levels of adoption, which usually translates into a bullish sentiment for Shiba Inu price.

According to IntoTheBlock data, SHIB witnessed an increased amount of large transactions on August 5, which signals increased whale activity. This spike dropped on August 6, but is still higher compared to the previous 7 days.

An increase in whale activity, coupled with rising Shiba Inu prices, signals renewed interest in the asset. This renewed interest could lead to a subsequent price increase. A volume increase accompanying any upward movement would be a stronger signal for a potential reversal.