New data reveals that the price of Shiba Inu (SHIB) closely mirrors the movements of Bitcoin more than any other asset, with both currencies showing the highest price correlation matrix over the past month.
The price of Shiba Inu is heavily influenced by the broader market trends. When the market is on an upward trajectory, Shiba Inu tends to experience price increases. Conversely, during a market downturn, SHIB sees significant declines.
This pattern has been consistent throughout the year, with a notable example in late April. Bitcoin dropped by 15% from its high of $66,000 on April 23 to a floor price of $56,000 on May 1, marking its lowest price in three months.
Interestingly, Shiba Inu followed a similar trend, plummeting from $0.00002689 on April 23 to a low of $0.00002057 on May 1. This represented a 23.5% drop in the same period that Bitcoin experienced downward pressure. The strong correlation between the two currencies is the reason behind this price drop.
According to market data sourced by IntoTheBlock, Shiba Inu has a 79% correlation with Bitcoin in the past 30 days. This indicates that the price movements of Shiba Inu are strongly influenced by the price movements of Bitcoin. In contrast, Cardano (ADA) only has a 62% correlation with Bitcoin during the same period.
While this correlation can be beneficial for Shiba Inu, it also poses some concerns. If Bitcoin encounters turbulence due to market headwinds, SHIB is unlikely to deviate from the overall market trend. This has been observed recently, as Shiba Inu has dropped alongside Bitcoin.
Bitcoin faced significant resistance at the $70,000 level, resulting in a drop to $68,000. This drop has also affected the price of Shiba Inu, adding to the existing bearish pressure it is facing. SHIB has experienced six consecutive days of losses since May 30, with a 6.17% decline this month.
It has been confirmed that Shiba Inu has a history of recording losses in June. However, Bitcoin has not suffered as much loss as Shiba Inu during this ongoing downturn, thanks to its greater resilience. SHIB is known for its higher volatility, which leads to steeper drops during market declines.
On the other hand, Shiba Inu also experiences higher price surges during an uptrend. For example, SHIB saw a 370% spike between late February and early March, reaching $0.000045. In comparison, Bitcoin only experienced a 33% increase during the same period.
The high correlation between SHIB and BTC is generally seen as a positive sign, especially as Bitcoin is expected to reach new highs. Analysts who have predicted lofty BTC prices for this market cycle also believe that Shiba Inu will experience greater rallies. Market expert Armando Pantoja expects SHIB to reach $0.001 when BTC reaches $100,000 to $250,000.
In terms of correlation, Shiba Inu only has a 69% correlation with Ethereum (ETH) and a 73% correlation with Dogecoin (DOGE). SHIB is currently trading at $0.00002383, with its Accumulation/Distribution metric indicating a sharp decline in investor holdings, dropping from 28 trillion SHIB on May 28 to the current figure of 12.6 trillion.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. The views expressed in this article are solely those of the author and do not reflect the opinion of The Crypto Basic. Readers are advised to conduct their own research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
