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The Shiba Inu price is going absolutely parabolic these days. Within the last 9 days, the SHIB price surged by more than 380%. Today, SHIB marked a two-year high at $0.00004574. Although the price suddenly dropped below $0.00002, marking a 54% within 2 hours, the price already recovered to above $0.000038. Here are four reasons driving the Shiba Inu price:
#1 Bitcoin’s Rally And Its Implications For Altcoins
Bitcoin’s price rally, particularly after the US Securities and Exchange Commission’s (SEC) approval of spot Bitcoin Exchange-Traded Funds (ETFs) in January, has set the stage for a broader cryptocurrency market rally. The approval not only enhanced Bitcoin’s legitimacy among traditional investors but also acted as a catalyst for its price to approach its all-time high.
The Bitcoin halving event, anticipated in April, further adds to the bullish sentiment, as historical data suggest that halving events, which reduce the reward for mining new blocks by half, tend to lead to substantial price increases due to the reduced supply of new Bitcoins entering the market.
The relationship between Bitcoin’s price movements and the altcoin market, including meme coins like Shiba Inu, is well-documented. Bitcoin’s rally has a “halo effect” on the broader market, creating a risk-on environment where investors are more willing to explore higher-risk assets, leading to increased investments in altcoins and meme coins.
This phenomenon is further amplified by the Fear Of Missing Out (FOMO), as investors rush to capitalize on potential gains, driving up prices in a self-reinforcing cycle.
#2 Market Psychology And Meme Coins
As reported yesterday, meme coins like SHIB could be one of the hottest bets in this crypto bull run. Why? Andrew Kang, co-founder and partner at Mechanism Capital, offered an analysis of meme coin psychology.
The appeal of meme coins lies in their ability to galvanize a community-driven speculative wave. Meme coins serve as a more accessible and globally available speculative vehicle compared to traditional stocks or more complex cryptocurrency projects.
The characterization of meme coins as a “Skill-based Global Lottery Platform” by Kang encapsulates the unique blend of community effort, skill, and luck that defines their market dynamics. This communal aspect, coupled with the thrill of speculation, fosters a highly engaging and participatory market environment.
Furthermore, the global accessibility and simplicity of meme coins make them an attractive entry point for new investors in the cryptocurrency market, thereby expanding the market base and increasing the liquidity and volatility of these assets. This broad appeal is crucial during bullish market phases, where the influx of new participants can significantly amplify price movements.
#3 The Elon Musk Effect
Elon Musk, renowned for his significant influence on crypto markets, particularly with meme coins like Dogecoin and FLOKI, has once again made waves with his social media activities. On February 26, Musk hinted at returning to “meme grindstone,” indirectly impacting meme coins.
Fine, I will get back on the meme grindstone 😂
— Elon Musk (@elonmusk) February 26, 2024
While not mentioning SHIB directly, the timing of Musk’s tweet corresponded with a notable uptick in its market performance. Several meme coins started to rally on February 26. The market seems to have interpreted his tweet as an indication that the present moment is opportune for investing in DOGE and other meme coins such as SHIB.
#4 Technical Breakout For Shiba Inu Price
The Shiba Inu price exhibited a clear technical bullish setup. Last December, the price of SHIB surged past a two-year ascending triangle pattern and underwent a successful retest until early February. This development laid the groundwork for the substantial price surge, in conjunction with the previously mentioned factors.
SHIB’s breakthrough past the 20-, 50-, and 100-week Exponential Moving Averages (EMAs) affirmed its strong bullish trend. After surpassing the August 2022 peak of $0.00001791, SHIB’s upward momentum became unstoppable.
