TL;DR
- Shiba Inu (SHIB) surged 50% in two weeks, but indicators like high FOMO and an elevated RSI hint at a potential pullback.
- The rally is possibly fueled by overall market momentum, Shibarium advancements, a spike in burn rate, and the expected launch of a Shiba Inu-related stablecoin.
Further Rally or Time for a Correction?
Shiba Inu (SHIB) is undoubtedly among the top crypto performers as of late, registering a 50% price increase in less than two weeks. Currently, it trades at around $0.0000196, representing a 10-week high. Its market capitalization exceeded $11.5 billion, making it the 14th-biggest cryptocurrency.
Despite the overall bullish conditions, some important elements signal that SHIB’s valuation may head south soon. Crypto analytics platform Santiment estimated that the FOMO (Fear of Missing Out) had reached a “significant” level, meaning the local top might be reached.
FOMO is a psychological phenomenon where investors feel anxious about missing a potentially profitable opportunity, leading them to make impulsive and emotionally driven decisions. It often occurs when prices are already on an upward trend, coinciding with hype on social media platforms.
The price surge of cryptocurrencies during high FOMO periods is often unsustainable as it’s driven more by emotions than fundamentals. As such, it might indicate that a pullback could be imminent.
Another factor suggesting that SHIB’s uptick might be interrupted soon is the asset’s rising Relative Strength Index (RSI). The technical analysis tool measures the change and speed of price movements. It varies from 0 to 100, with readings above 70 hinting that SHIB is overbought and potentially heading toward a correction. The RSI is currently set at a seven-month high of 90.
What’s Fueling the Rally?
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