Followers of the popular memecoin Shiba Inu are on FOMO, awaiting the launch of their layer 2 network called Shibarium, with which they hope to stop being a memecoin and fulfill the community's vision. And this has turned the Dogecoin-inspired token into one with the best performances during this beginning of the year, registering an increase of approximately 60% so far in January.
Screenshot taken from Coinmarketcap.com
As we can see, in a matter of two weeks the price of SHIB increased in value from $0.000008171 to $0.00001108 (at the time of writing), reaching a high of $0.00001290 on January 18, something that has not happened since early November last year.
Screenshot taken from Tradingview.com
Perhaps this rally may be due to conditions that have favored other coins in the market, however, SHIB's rise has outpaced the increase of any coin in the top, perhaps it has gained momentum in anticipation of the launch of its new layer 2 network, Shibarium, which will run on top of Ethereum's main Ethereum network and will allow it to reduce costs and improve the network's scalability by developing Dapps and soon to be beta release.
In an article published on January 15 on the project's blog, they note that the idea is to provide a platform on which the community can develop their projects, and clarify that although some see Shibarium as a tool to manipulate prices, that is not the goal.
Screenshot taken from blog.shibaswap.com
However, these announcements and the price movement of Shiba Inu has not gone unnoticed in the cryptocurrency ecosystem, and as we can see in the following image, this SHIB rally has turned the coin into an overbought asset, according to the relative strength index (RSI) reading, after the Shibarium launch was announced, the indicator surpassed the overbought threshold.
Screenshot taken from Tradingview.com
As we know this move is indicative that the token may be overvalued now, which is usually the harbinger that its price could undergo a correction, as these overbought levels prompt investors to exit their positions.
But with the price of SHIB trading at $0.000011, it is above the EMA20, EMA50 and EMA100, the short and medium-term EMAs, so it could be that this bullish move could be sustained, we must wait to see if the price can hold above the 200-week EMA; if so, the target would be to reach the resistance formed around $0.0000128.
Screenshot taken from Tradingview.com
As we well know, these meme currencies are unpredictable, and although they have a large community of followers, many only use them for speculation, so we must be vigilant, because although there is a bullish sentiment and potential for further price appreciation the currency is overvalued, so we must be cautious.
Well friends, the important thing is to be attentive to the indicators and the news around Shib Inu if you decide to open a position, remember never get carried away by the FOMO.
I hope you liked the information. See you next time!
Posted Using LeoFinance Beta