Shiba Inu (SHIB) Bounces 7% After Brutal Drop to $0.0000116 – Relief Rally or Fakeout?

Shiba Inu (SHIB) Bounces 7% After Brutal Drop to $0.0000116 – Relief Rally or Fakeout?

Shiba Inu (SHIB) has surged 7% after a sharp sell-off, signaling a potential comeback. Large investors, known as whales, moved significant funds into SHIB, leading to a 553% spike in inflows. This development suggests a renewed interest in the meme cryptocurrency despite recent market volatility.

Whale Activity Surges, Boosting Shiba Inu’s Momentum

According to IntoTheBlock, whale inflows jumped from 1.27 trillion SHIB on February 2 to 6.51 trillion SHIB on February 3. This massive movement indicates that large holders might be accumulating SHIB at discounted prices. Whale accumulation often precedes significant price swings, making traders optimistic about a potential rally.

Source| IntoTheBlock

The recent crypto market downturn significantly affected meme coins. However, the rise in whale activity suggests that major players see a buying opportunity. If this trend continues, Shiba Inu could maintain its upward momentum and break key resistance levels.

Bitcoin’s Drop and Market-Wide Liquidations

Bitcoin fell below $91,000 early Monday, triggering widespread panic and the highest liquidations in six months. As traders rushed to close positions, open interest in futures contracts dropped to its lowest level since November 11, 2024.

Read Also: Shiba Inu’s Price Crash: What’s Behind the Decline in January?

The broader crypto market lost about $360 billion at one point, according to CoinGecko. Despite these losses, large-scale liquidations often help stabilize the market. They eliminate weak hands and create room for stronger price recoveries, setting the stage for potential gains.

SHIB’s Price Outlook and Key Levels to Watch

SHIB recently dropped to $0.0000116 after hitting a high of $0.0000169. At the time of writing, SHIB trades at $0.00001542, marking a 7% increase in 24 hours. If this recovery continues, the token could break past its 50-day moving average at $0.00001927. A further push might take SHIB to the 200-day moving average at $0.00002119.

On the downside, if selling pressure returns, SHIB must hold above $0.000011 to avoid further losses. Traders will closely watch these levels to determine the token’s next move.

Will Shiba Inu Breakout or Stall?

The recent whale inflow surge suggests that major investors expect a potential price rebound. Historically, whale accumulation has fueled strong rallies, and many hope this pattern will repeat. However, the market remains unpredictable, and Bitcoin’s performance will play a crucial role in SHIB’s trajectory.

If the bullish momentum sustains, SHIB could attempt a breakout past its key resistance levels. Conversely, if broader market conditions remain unfavorable, the token might struggle to hold its gains. The next few days will be critical in deciding whether SHIB can sustain this rally or face another decline.

Final Thoughts

SHIB’s 7% recovery and the massive 553% increase in whale inflows highlight renewed interest in the token. Bitcoin’s recent drop below $91,000 triggered a wave of liquidations, which contributed to market volatility. Despite this uncertainty, SHIB’s ability to rebound quickly suggests that investors see potential for future gains.

Read Also: Dogecoin Takes a Dive: What’s Behind the 34.9% Plunge?

If SHIB maintains its momentum, it could challenge key resistance levels at $0.00001927 and $0.00002119. However, if selling pressure returns, the token must defend support at $0.000011 to avoid further losses. With whale activity increasing, traders will closely monitor SHIB’s performance in the coming days. The question remains: Will this rebound lead to a larger breakout, or is it just a temporary relief rally? Time will tell.

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Disclaimer: The information in this article should not be considered financial advice, and FXCryptoNews articles are intended only to provide educational and general information. Please consult with a financial advisor before making any investment decisions.

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