Shiba Inu’s price has crashed this year, erasing billions of dollars in value and mirroring the broader decline across the altcoin market.
Shiba Inu (SHIB) was trading at $0.00001130 on July 2, slightly above its year-to-date low of $0.00001035. This article explores four key reasons why SHIB may be poised for a rebound.
1. Shiba Inu price has formed a double-bottom pattern
One major reason for potential upside is the formation of a double-bottom pattern on the daily chart. This is a common bullish reversal setup characterized by two distinct lows and a neckline, which in SHIB’s case is at $0.00001755.
As long as the token remains above the support at $0.00001035, the bullish structure remains intact. A confirmed breakout above the neckline could open the door to further gains. However, a break below $0.00001035 would invalidate this pattern and likely signal more downside.
SHIB price chart | Source: crypto.news
2. SHIB supply in exchanges falling
Further, there are signs that investors are no longer dumping their tokens as evidenced by exchange inflow and outflow data. According to Santiment, the volume of tokens on exchanges has dropped to 140.38 trillion, down from the 30-day high of 141 trillion.
This shift suggests that investors, particularly whales, are holding rather than selling. The supply held by whales has remained stable at around 709 trillion SHIB over the past few months.
SHIB supply in exchanges | Source: Santiment
3. Futures open interest are soaring
Another bullish indicator is the rise in SHIB futures open interest, which suggests growing demand among traders. Open interest climbed to $59.2 million on July 2, up from last month’s low of $52 million. Historically, rising open interest often precedes price rallies in crypto.
In line with this, as shown below, the funding rate has turned positive, signaling that investors believe that the price will be higher in the future than it is today.
SHIB funding rate and open interest | Source: Santiment
4. Potential Bitcoin price rally
Further, Shiba Inu price may rebound because of the potential crypto market bull run, which will be triggered by Federal Reserve interest rate cuts and Bitcoin price rebound.
In a statement on Tuesday, Jerome Powell noted that the bank may decide to cut rates this month if inflation falls. However, most analysts believe that it will start cutting in September, which will boost crypto prices.
There are also odds that Bitcoin will jump to a record high. Polymarket places odds of it reaching an all-time high before October at 81%. These odds are rising due to the ongoing ETF inflows and the formation of a cup-and-handle pattern. A Bitcoin rebound will likely lead to more gains in the altcoin market.
