Is Shiba Inu overheating after SHIB price gains 75% in two weeks?
Shiba Inu (SHIB) looks poised to undergo sharp price corrections after rallying nearly 75% in almost two weeks.
On Monday, the meme-token climbed to $0.00002961, its best level since Jan. 18, amid renewed buying interests across the cryptocurrency market. Before the retracement, SHIB's price had crashed by almost 80% from its record high of $0.00008870.
Nonetheless, the wild price recovery also came closer to triggering two classic sell signals. First, SHIB's daily relative strength index (RSI), a technical indicator that fluctuates in the range between 0 and 100 to signal whether an asset is overbought (RSI>70) or oversold (RSI<30), showed nearly-overbought conditions after rising to 60.
Last, SHIB's daily relative volatility index (RVI), which measures the standard deviation of low and high prices, dropped below 50, a sell signal. In a "perfect" scenario, traders close their long positions after the RVI drops below 40. At press time, it came out to be near 48.
More cues for a possible SHIB price correction came from three other technical indicators. First, the Shiba Inu token's current upside momentum showed signs of weakening near its 50-day exponential moving average (50-day EMA; the red wave in the chart below), at around $0.00002761.
Second, the SHIB price's ongoing uptrend accompanied lower volumes, i.e., they came out to be nowhere closer to the volumes witnessed during the token's October 2021 price rally. That showed scant liquidity in the Shiba Inu market, making it harder for traders to execute buy and sell orders at desired levels.
As a result, a lower liquid market tends to witness wilder price swings in either direction.
Third and last, SHIB price neared a key pullback level of $0.00003358 that coincided with
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