The popular memecoin Shiba Inu has been rallying higher and higher throughout the month of October. Investors are showing bullish sentiment about it. But analysts are predicting some drop in its value after it reaches higher than what it can hold onto. They consider it overvalued and expect it to pull back by 25-35%. The indicator Relative Strength Index that measures the magnitude of recent price changes of an instrument indicates this overvaluation. Any reading below 30 shows the instrument is overselling. An above 70 indicator shows it is overbought.
SHIB crossed the 70 mark on October 3 and reached 95 after three days. This should have led to a price correction but it continued to go higher, eventually increasing by 574% and touch $0.00004860 on October 26. At the same time, its RSI went down, creating a divergence between its price and momentum. It revealed SHIB’s underlying weakness in its ongoing uptrend, raising the prospect of it going down in next few days.
SHIB has the potential to touch $0.00005224 before a price correction takes place. Its next lower target can be 1.0 Fib line of the target $0.00003466 which is 25-35% lower than the current price. Any bullish move can make Shiba Inu overvalued as per its RSI readings, leading to a correction in the future sessions. The recent massive price surge has added a decimal point to its value.
Fanatics of altcoins expect it move up with some baby steps and drop a zero. They have been celebrating after SHIB recently dropped a zero. However, they have to wait before it can cross its all-time high achieved in early May at $0.00003.
