Shiba Inu is hoping to become more than just a Dogecoin (DOGE)-inspired memecoin as it comes closer to launching its layer-2 network called, Shibarium. Meanwhile, the Shiba Inu (SHIB) token has emerged as one of the best performers so far in 2023.
SHIB price jumps 60% in 2023
SHIB’s price has rallied nearly 60% year-to-date (YTD) to $0.00001294, its highest since early November 2022.
SHIB/USDT daily price chart. Source: TradingView
The gains started appearing mainly due to favorable macro conditions that prompted similar rallies elsewhere in the crypto market. Nonetheless, the SHIB price rally picked up momentum as investors assessed its announcement of the upcoming beta release of Shibarium.
Shibarium is reportedly a layer-2 network that would run atop the Ethereum blockchain mainnet. In other words, it would enable developers to build and launch decentralized applications while aiming for lower transactional costs and improved network scalability.
The SHIB price is up 25% since Jan. 16, when the Shiba Inu team teased its audience with the Shibarium launch announcement.
Introduction to Shibarium: Shiba Inu’s Layer 2 Network – Rejoice #ShibArmy! Shibarium Beta is about to be launched, and through this article we want to introduce some basic concepts in order to provide clarity to the community.
Read more: https://t.co/xWyPaVlQQ4
– Shib (@Shibtoken) January 15, 2023
Shiba Inu price: Another 75% boom ahead?
Shiba Inu’s rally has made it an excessively bought asset on a daily timeframe, according to its relative strength index (RSI) reading at almost 86 on Jan. 18 – sixteen points above the overbought threshold of 70.
Related: What is ShibaSwap and how does it work?
Ideally, an overbought RSI prompts investors to unload their positions, leading to a price correction. In other words, SHIB risks dropping toward its 200-day exponential moving average, represented by the blue line in the chart below, near $0.00001120.
SHIB/USDT daily price chart. Source: TradingView
However, on a long-term basis, SHIB’s price rally is likely to continue if the bullish reversal pattern on the weekly chart is to be believed.
Dubbed the “falling wedge,” the pattern develops when the price trends lower inside a range defined by two descending, converging trendlines.
It resolves after the price breaks above the upper trendline toward the level at a length equal to the wedge’s maximum height.
SHIB has entered the breakout stage of its falling wedge pattern, as shown below. It now sees an extended upside toward $0.00002063 by March 2023, up 35% from current price levels.
SHIB/USDT weekly price chart featuring falling wedge. Source: TradingView
Alternatively, a potentially bearish scenario would see SHIB falling short of the wedge breakout target if the price reverses from its interim resistance level at the 50-day exponential moving average (the red line) near $0.00001309.
Such a downturn would risk sending SHIB’s price toward the wedge’s upper trendline near $0.00000800, or down 40% from current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk and readers should conduct their own research when making a decision.