Meme token has long way to go to face reversal, but this signal might help it
The market is finally recovering after weeks of depressing performance, and numerous assets are reaching pivotal points at which a long-term reversal becomes a possibility. Unfortunately, there is still a long way to go to cover the losses the industry experienced after the FTX implosion and the prolonged bear market.
SHIB might become bullish soon
According to the four-hour chart, two moving averages might form a popular “golden cross,” which is often considered one of the strongest bullish indicators in general. Unfortunately, the cross on timeframes lower than 24 hours is not as valuable as the same signal on the daily chart.
One way or another, the cross will be the first sign of an upcoming reversal for Shiba Inu, which has been moving in a severe downtrend for almost 200 days. The most likely reason behind the negative performance is the distribution of funds on the network.
During the insane bullrun SHIB had in 2021, the percentage of retail investors who held the asset only to sell it at a modest profit reached almost 80%, which is a critical number for any kind of asset.
As soon as the price of the token reversed down, most retail traders added fuel to the downtrend by selling their holdings as soon as possible without looking at the losses they were facing. The profitability of the token tumbled from almost 100% to a critical 30%, which made it extremely unattractive for retail investors.
Through 2022, whales were the only group of traders that had been actively purchasing the token without looking at its price performance. But even with the support of a large buyer, another rally for SHIB was impossible without the help of many retail traders.
The only scenario in which a reversal would be a possibility for Shiba Inu would be the recovery of the cryptocurrency market in general and the return of upward volatility for the token, which may attract some retail investors back.
Since the majority of Shiba Inu holders are whales rather than retail traders, the selling pressure should not be a problem amid the potential rally acceleration. According to IntoTheBlock’s data, more than 54% of SHIB owners are long-term holders and only 7% gained exposure to the token less than one month ago.
Ethereum on the verge of breakthrough
As we mentioned in our previous market review, Ethereum has reached an important resistance level, which will act as a barrier between the $1,100-$1,300 price range and higher prices.
In case of a successful breakout, Ethereum has all the chances to rally toward the next major resistance level right away. The 200-day moving average not only acts as a technical resistance but also correlates with a price level Ether could not conquer the last time.
At press time, Ethereum is trading at the $1,288 price level and is battling the 50-day moving average for the last 48 hours.
