Should you buy Shiba Inu as it consolidates?
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Shiba Inu price has been in a tight range in the past few days.
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The number of Shiba Inu holders stands at over 1.24 million.
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The FTX and Alameda Research crisis is a major headwind.
Shiba Inu price has gone nowhere in the past few days even as inflows in the ecosystem continue. The token was trading at $0.0000092, where it has been in the past few days. This price is about 48% below its highest level in August, giving it a market cap of more than $5 billion.
Why is SHIB retreating?
Shiba Inu, like other cryptocurrencies, has been in a steep freefall this year for several reasons. First, it has been hit by the actions of the Federal Reserve. In a bid to slow the soaring consumer inflation, the bank has hiked interest rates by 400 basis points. It is also implementing a quantitative tightening (QT) program that is reducing its balance sheet.
Historically, risky assets like cryptocurrencies and stocks tend to underperform in a period of high-interest rates. This also explains why key American indices like the Dow Jones and Nasdaq 100 indices have slumped by over 10% this year.
Second, Shiba Inu has slumped because of the ongoing crisis in Twitter. Following Elon Musk’s acquisition of Twitter, most analysts expected that he will have a positive impact on meme coins like Dogecoin and Shiba Inu. Recently, however, Twitter has been in a turmoil as advertisers flee. Musk also hinted that Apple was considering pulling the app from its app store.
FTX crisis
Most importantly, Shiba Inu price has crashed because of the ongoing crash of FTX and Alameda Research which you can find here. The collapse has led to significant concerns of contagion in the crypto industry. This explains why most coins and tokens have been in a strong downward trend.
In most cases, the collapse of a key player in an industry leads to a contagion risk. For example, the collapse of Lehman Brothers put most American and global banks at risk.
On a positive side, data shows that there are now more than 1.24 million Shiba Inu holders while the number of active addresses has risen in the past few days.
Shiba Inu price forecast
The daily chart shows that the SHIB price has been in a strong bearish trend in the past few months. It was trading at $0.0000092, where it has been recently. The coin has moved below the descending trendline shown in orange. It has also moved below the 25-day moving average while the RSI is pointing upwards.
Shiba Inu has formed a small head and shoulders pattern. Therefore, there is a possibility that the coin will have a brief rebound in the coming days. If this happens, it could retest the resistance at $0.00001.
How to buy Shiba Inu
Binance
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.
Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.
eToro
eToro is a global social investment brokerage company which offers over 75 cryptocurrencies to invest in.
It offers crypto trading commission-free and users on the platform have the option to manually invest or socially invest.
eToro even has a unique CopyTrader system which allows users to automatically copy the trades of popular investors.
