Why is Shiba Inu Price Surging Today?
By CoinChapter.com on Google News
NOIDA (CoinChapter.com)—The price of Shiba Inu has surged by over 14% on July 8, reaching a daily high of around $0.000017. This sudden increase in interest can be attributed to on-chain metrics and a bullish technical setup, which could explain why the price is rising today.
Recent data from CryptoQuant and Santiment shed some light on the factors driving SHIB’s price action.
On-Chain Metrics as a Catalyst for Shiba Inu Price Surge
Data from CryptoQuant reveals a significant shift in SHIB’s exchange netflow. In the past few days, there has been a substantial negative net flow, with billions of SHIB tokens being withdrawn from exchanges.
This trend typically indicates accumulation as investors move their tokens from exchanges to private wallets, reducing immediate selling pressure. Over the last 30 days, net flows have decreased significantly, suggesting a strong inclination towards holding rather than selling. This could be a contributing factor to the price surge of Shiba Inu today.
Data from Santiment on SHIB distribution by balance supports the bullish narrative. While large holders, or ‘whales’, have decreased their holdings, smaller holders have remained stable or even increased their positions.
In particular, the percentage of SHIB held by addresses with balances between 100,000 and 1 million coins, as well as 10 million to 100 million coins, has shown resilience and growth. This shift indicates that while some whales may be selling off, the broader base of investors remains confident.
Despite the cautious approach of larger holders, the overall sentiment appears optimistic. The consolidation phase, as indicated by stable open interest and funding rates, suggests that the market is waiting for new catalysts.
This anticipation could potentially lead to a breakout, especially with signals of reduced sell pressure and steady accumulation by smaller holders.
Bullish Technical Pattern in SHIB Price Movement
Meanwhile, SHIB’s price has formed a bullish technical setup known as the ‘bull flag pattern’.
The memecoin rebounded from the support trendline of the flag after bulls managed to prevent a breakout below the pattern, which would have invalidated the setup.
A bull flag pattern emerges when the price of a crypto token experiences a steep rise, creating the flagpole. This pattern is common in assets that are in a strong uptrend.
After the initial surge, the asset undergoes a consolidation phase, forming the flag of the pattern. Despite the consolidation, the price remains steady due to continued buying pressure. Typically, a breakout from this consolidation phase triggers another significant uptrend.
The pattern is considered complete when the price breaks out of the flag area, resuming the previous upward trajectory. Traders calculate the price target of the breakout by adding the length of the flagpole to the breakout price level.
Based on technical analysis, if the token confirms the bullish technical pattern, the price of SHIB could potentially rally by nearly 395%, reaching a theoretical price target of around $0.0000794.
It is unlikely that the memecoin will reach the pattern’s target price immediately after confirmation, but a breakout could attract more buyers to the market.
