The Bitcoin (BTC) price movement is the most watched chart in the whole crypto space. Not only does it occupy a majority share of the whole industry’s market capitalization, most digital assets follow its trajectory as well. Its price has been stuck in the $29,000 range recently. The price broke into the $30,000 range before being pushed back. Conversely, Shiba Inu followed a different path and continues to go up.
The investors’ interest in SHIB can be attributed to the impending release of its layer-two scaling solution, Shibarium. However, Bitcoin is showing signs of weakness and is unable to get through the $30,000 psychological level. Another worrying data is the doubling of SHIB’s open interest rates in Binance. According to Coinglass, the open interest rates went up to more than $101 million for August.
And why is SHIB’s higher interest rate a cause for worry? The open interest rate is the total value of the outstanding futures contracts on the exchange that have not been settled yet. A higher interest rate means traders are betting that the meme coin will go up. Analysts believe that there is an inverse relationship between Shiba Inu and Bitcoin. This simply means that when SHIB pumps, BTC Dumps, and vice versa.
What is Causing the Shiba Inu Pump?
For most digital assets, the news of an impending upgrade comes with a pump. This is most especially true if the upgrade fulfills all expectations. The implementation of Shibarium is expected to give utility to the Shiba Inu ecosystem.
But what do the charts say? Are the charts aligning?
In the daily chart below, it does seem that Shiba Inu is gearing up for higher prices. Not only did SHIB have a golden cross of the 21 and 55 EMA, but it also broke through the 200 EMA as well. It is about to test the 0.0000117 level. This level has a horizontal and 0.618 resistance. If this level is breached, then it is expected the price will go up some more.
How about Bitcoin?
Bitcoin is unfortunately stuck and ranging between 29k and 30k. Investors are probably waiting for a major event like the approval or rejection of pending spot ETF applications. Let us check the charts for clues.
For lack of better terms, BTC is currently boring. The chart below shows BTC traversing a falling wedge after a spectacular pump from mid-June. However, a falling wedge or channel is usually bullish and tends to break to the upside. It is currently supported by the 0.382 Fib level, though it is possible to go down to the 28k level for a retest. This will probably coincide with SHIB hitting the 0.618 level.
Bitcoin vs SHIB
In the world of crypto Bitcoin is the undisputed king of all digital assets. It is considered the top blue chip asset, but meme coins, like Shiba Inu, are more volatile and can give higher returns in the short term. This is one of the reasons why meme coins are popular with a lot of traders.
From a trader’s point of view, it makes sense to seek more volatile assets when Bitcoin is trading in a small and boring range. This is probably the reason why the SHIB’s futures interest rates pump whenever BTC is showing weakness or low volatility. The question is if SHIB will continue to pump or if BTC will surprise us with a sudden break to the upside.
Honestly, it is hard to predict. Will Shibarium surpass expectations? Will the SEC finally approve all the spot BTC ETFs? These are some of the questions we need to answer first. A solid chart analysis and the latest news will give us a better idea of where the market is heading.
The information provided is for informational purposes only and is not intended as financial advice
