Shiba Inu (SHIB) Poised for 2x Rally Amid Easing Trade Tensions and Positive Economic Data

Shiba Inu (SHIB) is poised for a significant price rally in the coming weeks, according to chart analysis and macroeconomic indicators. The cryptocurrency, currently trading around $0.000016, has shown impressive gains since hitting multi-month lows in early April. The market capitalization of SHIB is approximately $9.6 billion, reflecting its substantial presence in the cryptocurrency market.

Macroeconomic developments have been favorable for SHIB. Trade tensions between the US and China have eased, with both countries announcing significant reductions in tariffs. This development, along with the US delaying tariff implementations on other trading partners, has created a more stable global trade environment. Additionally, US inflation data released in mid-May indicated a cooler-than-expected inflation rate, hitting a four-year low. This suggests that fears of a tariff-related inflation spike have been overblown, providing a positive outlook for risk assets, including meme coins like SHIB.

Recent economic data releases have shown that while the US economy is experiencing some cracks, it is not on the brink of a major recession. This economic stability, combined with positive macro news, has given risk assets the green light to continue their upward trajectory. Chart analysis further supports this bullish outlook. SHIB broke above a long-term downtrend in mid-April and experienced a strong bounce from its 21 and 50-day moving averages in early May, indicating that bulls are currently in control of the market. A surge to late 2024’s highs in the $0.000033 area, representing a 2x rally from current levels, seems likely.

Historically, meme coin seasons have required a major positive catalyst to gain momentum. In late 2024, the election of a pro-crypto US Presidential candidate was a significant driver. In early 2024, the success of spot Bitcoin ETFs and the surge in BTC prices played a crucial role. Throughout 2021, the Fed and the US government’s extensive easing policies, including zero interest rates, quantitative easing, stimulus checks, and large deficit spending, fueled the meme coin market. An easing of tariff tensions, coupled with a return of economic optimism and potential Fed rate cuts through the end of 2025, could lift the markets enough to push SHIB back to multi-year highs. However, achieving a 5x or more increase from current levels would likely require 2021-level fiscal and monetary policy conditions, which have historically been enacted to address major economic crises.

There is a possibility that the US economy, burdened by recent trade uncertainty, persistently high interest rates, and a bloated Federal debt repayment burden, could slide into recession this year. In such a scenario, the SHIB price would likely see a substantial decline before recovering. Meme coin investors are advised to continue dollar-cost averaging into major tokens like SHIB, anticipating that higher prices will eventually come. This strategy can help mitigate the risks associated with market volatility and position investors for potential gains in the future.