SHIBA Inu Smart Money Divergence Calls for a Potential Bottom
Shiba Inu (SHIB) suffered a deep correction of about 80% from its all-time high of $0.00008864. However, recent price action development signals a potential bottom and a trend reversal. Often, major swings (highs or lows) can emerge when an asset is diverging from a benchmark index that tracks the market's overall performance – in technical terms, this is called relative strength.
Relative Strength Signal
If we compare SHIB's price against the altcoin index ALTPERP, which tracks the altcoin average market performance, we can observe that Shiba Inu shows relative strength.
To measure the relative strength, we simply compare the highs and lows of the two assets.
On the one hand, SHIB's price has printed a higher low, which shows a shift in the price structure while, at the same time, the altcoin index printed a lower low.
This tells us that Shiba Inu is outperforming its peers within the altcoin market.
We can't call right away a bottom on the relative strength signal alone because the current bounce lacks momentum. However, if we study the Relative Strength Index (RSI) oscillator, we can tell that most RSI readings are below the 50 mid-level. So the bearish momentum still persists.
For a reversal to happen, two major things need to happen:
RSI needs to break above the 50 mid-level
SHIB's price needs to break above its 200-day simple moving average
Looking forward: The first major resistance level comes around the $0.00002662 level. On the flip side, the support level comes at the big round number of $0.00002000.
