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The run-up in the price of Shiba Inu (SHIB) so far in October pushed the SHIB token to become the 20th largest digital asset by market capitalization.
Shiba Inu's circulating market valuation jumped to $11.08 billion earlier this week and is currently above $10 billion, putting it in the top-20 by market cap for the first time. As a result, the Dogecoin-inspired meme cryptocurrency became more valuable than popular blockchain projects like Stellar (XLM), Polygon (MATIC), and Tron (TRX).
The growth in Shiba Inu's valuation came on the heels of a tweet published by Elon Musk. On Oct 4, the Tesla CEO posted the picture of his pet dog—a Shiba Inu breed—with the caption "Floki Frunkpuppy." SHIB jumped by more than 40% an hour after the tweet.
Floki Frunkpuppy pic.twitter.com/xAr8T0Jfdf— Elon Musk (@elonmusk) October 4, 2021
Crypto speculators tend to read too much into Musk's tweets. For example, the billionaire entrepreneur was instrumental in pushing Dogecoin (DOGE) price higher earlier in 2021 via Twitter.
SHIB price surged by almost 400% a week after opening the fourth quarter of 2021 at $0.00000725. In doing so, the token retested its five-month high of $0.00003528 on Oct 7.
Nevertheless, SHIB underwent a 40%-plus price correction on the same date as some traders decided to unwind their spot positions for interim profits. As a result, Shiba Inu's market cap fell in tandem, going to as low as $8.06 billion on Friday.
The sell-off across Shiba Inu markets (against the dollar and Bitcoin) prompted buy-the-dip sentiment. A rebound rally ensued, which pushed the SHIB price up by more than 45%. At its highest on Saturday, the token was changing hands for $0.00003020, with its market cap around $10.73 billion.
What is next for SHIB?
Shiba Inu price dropped on Oct. 9 by more than 5% to reach a fresh intraday low of $0.00002575. In doing so, the cryptocurrency hinted at forming a potential descending triangle pattern, suggesting additional losses ahead.
Related: 'Much ow' ahead? Dogecoin chart fractal puts Shiba Inu's 390% QTD rally in danger
In detail, Descending Triangles are typically bearish patterns that form when the price trends lower while fluctuating between an area defined by two converging trendlines: one falling and the other, horizontal, such as the ones SHIB has formed in the chart below.
The formation of lower highs atop a standstill support line indicates weakening buying sentiment among traders. As a result, the price ultimately tends to break below the horizontal trendline. In doing so, its target shifts to a level at a length equal to the maximum Triangle height.
In other words, SHIB price may go under $0.00001000 in the coming sessions if the abovementioned support level fails to hold.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.