Shiba Inu (SHIB) Drops 15% Amid Market Correction, Analysts See 402% Rally Potential

Shiba Inu (SHIB) has experienced notable volatility in recent weeks, with its price declining by over 15% in the past week. This downturn is part of a broader cryptocurrency market correction, influenced by Bitcoin’s fall below the $78,000 mark. Despite this decline, SHIB has outperformed Dogecoin (DOGE), which saw a steeper drop of 27% over the same period.

Prior to the recent market decline, on-chain data indicated a waning interest in SHIB. Crypto analyst Ali Martinez highlighted this trend, noting a 79% decline in whale activity on the ShibaInu network over the past three months.

Despite the recent weakness, some analysts remain optimistic about SHIB’s potential. On Wednesday, analyst Javon Marks pointed to a bullish chart formation that suggests a massive rally could be on the horizon. According to Marks, SHIB prices are maintaining the structure of a large Inverse Head & Shoulder, with a $0.000081 target still in play. This formation suggests an over 402% run to reach the target price.

Other indicators also point to signs of accumulation and a possible reversal for SHIB. The price is currently consolidating, with the Relative Strength Index (RSI) at 54.72, indicating neutral momentum. While buying pressure is present, it remains insufficient for a breakout. The Stochastic RSI at 54.72/57.76 has cooled off but could signal renewed buying if it turns upward. A move above 60 RSI may spark an uptrend, while a drop below 50 could signal further downside.

The Moving Average Convergence Divergence (MACD) indicator is flattening from bearish territory, hinting at a possible shift in momentum. Additionally, although trading volume has only increased by 13% in the past 24 hours to $312 million, it still signals ongoing accumulation.

Beyond price action, SHIB’s ecosystem continues to expand with key developments aimed at improving liquidity and user experience. Earlier this week, the Shiba Inu team introduced upgraded liquidity pools designed to enhance liquidity management. The update allows users to seamlessly migrate, import, or create liquidity pools, streamlining the process.

These advancements have generated significant interest in Shiba Inu, driving a surge in wallet addresses on its Ethereum Layer 2 network. Over the past week, the number of wallet addresses has skyrocketed by around 500%, jumping from approximately 9.4 million to over 55.7 million.

Another bullish factor for SHIB is its increasing token burn rate. On Thursday, the Shiba Inu burn rate spiked by over 1,300%, removing over 30 million SHIB tokens from circulation in just one day. Token burning helps reduce supply, making SHIB scarcer, which could positively impact its price in the long run.

At press time, SHIB was trading at $0.000012, reflecting a 3.91% drop in the past 24 hours.

According to the analyst's forecast, a 400% rally is a bold statement, indicating that the analyst believes Shiba Inu has the potential to quadruple in value. This forecast is based on the current market conditions and the technical analysis of SHIB's chart structure. The bullish chart structure suggests that the cryptocurrency is in a strong upward trend, which could lead to significant gains for investors.

The analyst's prediction is not without risk, as the cryptocurrency market is known for its volatility. However, the bullish chart structure of SHIB provides a strong foundation for the analyst's optimistic outlook. The prediction of a 400% rally is a testament to the potential of Shiba Inu and the broader cryptocurrency market. Investors should approach this prediction with caution, as the market is subject to sudden changes and fluctuations.