- The correlation between the cryptocurrencies dropped after prices moved in different directions recently.
- An in-depth analysis showed that SHIB could reach $0.00013.
Shiba Inus [SHIB] The red-hot start to March saw the token correlate with Bitcoin [BTC] was a strong one. But since SHIB lost its lucky strike, the token and BTC have gone in opposite directions.
According to IntoTheBlock, SHIBs price correlation with Bitcoin is not closely related. About a month and a few weeks ago, the 30-day correlation was almost 0.94. However, AMBCrypto noted that the metric had dropped to 0.89 at the time of writing.
The correlation ranges from -1 to 1. Values from -1 to 0 imply that the prices of the cryptocurrencies involved are negatively skewed. On the other hand, a reading close to 1 indicates that the assets involved are moving in a similar direction.
Source: IntoTheBlock
Capital flowing from BTC to the memecoin?
Over the past 30 days, the price of Bitcoin has risen, while SHIB recorded a decline of 5.72%. However, the memecoin’s performance could be in its favor.
In recent articles, we reported that capital could flow from BTC to altcoins. Should this be the case, SHIB’s declining correlation could diverge from Bitcoin’s potential bearish trend.
If this is the case, what height can the token reach? On a daily basis, the long-term Exponential Moving Average (EMA) showed a bullish trend for SHIB.
At the time of writing, the 50 EMA (blue) had passed the 200 EMA (yellow) and the price of the token was a lot higher than both EMAs. With this position, the token’s price might not fall below $0.000010 this cycle.
Instead, the Fibonacci indicator suggested that SHIB could tap $0.00013 at the peak of the bull market. This means that the price still has the potential to rise higher than a 200% increase.
In the short term, SHIB’s price could rise to $0.000030, according to guidance from the Money Flow Index (MFI). At the time of writing, the MFI was close to 60.00, indicating that a large amount of capital was flowing into the token.
Source: TradingView
Both assets share the glory
If this continues, SHIB could outperform BTC in the coming weeks. Despite the potential to surpass BTC in the near term, SHIB may never come close to matching the number of holders with Bitcoin in their portfolios.
According to Santiment, the total amount is BTC holders amounted to 53.63 million. Shiba Inu, on the other hand, had 1.39 million.
Furthermore, the simple interpretation of this means that many market participants believe in the long-term potential of Bitcoin versus SHIB.
Source: Santiment
Realistic or not, here is SHIB’s market cap in BTC terms
However, that’s not to say the SHIB’s long-term potential isn’t something to watch. But in the coming years, its price action may not match that of Bitcoin.
For the short to medium term, this may not be the case as SHIB’s price could rise much higher.