- Weak cryptocurrencies can’t cope with new dollar strength
- Shiba Inu gave up everything he acquired in 2023
- Technical conditions suggest further downside
The crypto market bearishness of 2022 appeared to be over in early 2023. Bitcoin then rebounded, dragging the entire cryptocurrency ecosystem.
Shiba Inu, one of the most speculated cryptocurrencies, followed Bitcoin. But recently something has disconnected.
More precisely, while Bitcoin is still trading near its annual high, the Shiba Inu has given up all its 2023 gains. To make matters worse, the price trend is unfolding in a bearish pattern, a descending triangle, and breaking below the horizontal support could trigger further downside.
Weak cryptocurrencies can’t keep up with dollar strength
A weaker dollar has caused the cryptocurrency market to rise. But with so many projects in the cryptocurrency space, it’s natural to think that a dollar reversal won’t do it all.
And in the last few weeks it has reversed and gone up a bit – not by much, but still. For example, the US dollar has only risen by a few hundred pips against its rival, the euro, so the recent strength of the dollar is not unusual.
But when the dollar strains, weak cryptocurrencies plummet. The same goes for Shiba Inu, but bitcoin has remained relatively unchanged.
Ironically, the recent strength in the dollar comes in the context of the Fed suggesting it may pause its tightening cycle as inflation falls. Imagine what would happen if inflation spiked even more and the Fed changed its rhetoric and hiked rates even more.
Overall, the Shiba Inu doesn’t look good. A look at the technical landscape shows that there is enormous pressure building on the horizontal support and is likely to weaken further.