Indecisiveness would be the best word to characterize the cryptocurrency market's state right now, as the majority of assets are still moving upward, while fundamental indicators like DXY show that risk assets will take a hit.
Upcoming challenges for SHIB
Shiba Inu (SHIB), the popular meme-inspired cryptocurrency, is experiencing a surge in its value, having gained 20% in just a few days. This has led to the formation of some key targets that the asset aims to reach.
The first target is $0.000015, which is a strong psychological resistance level and a previous local top. This level is considered to be a crucial one for Shiba Inu, as it has failed to cross this mark on several occasions in the past. A successful breakthrough of this target could set the stage for the next leg of the bull run.
The second target for Shiba Inu is $0.000018, a level that the asset failed to surpass back in August, 2022 This level has been a major obstacle for the asset, and if it can break through this barrier, it could be a sign of a sustained bullish trend.
The third and final target for Shiba Inu is $0.000025, the last level that the asset reached prior to its massive 70% breakdown. This level represents the highest point of the previous bullish trend, and a successful attempt to reach this level could indicate a return to the bullish trend for Shiba Inu.
DXY's worrisome movement
The DXY index, which tracks the value of the U.S. Dollar against a basket of major currencies, has been gaining more than 2% to its value in the last three trading days. This increase in the value of the U.S. Dollar has been viewed as a negative factor for the cryptocurrency market and other risk assets.
When the U.S. dollar strengthens, it becomes more expensive for foreign investors to buy risk assets, including cryptocurrencies. This, in turn, reduces demand for these assets, which can lead to a decrease in their prices. Additionally, the rise of the DXY index can also lead to a flight to safety among investors, which can further exacerbate the sell-off of risk assets.
Moreover, the rise of the DXY index comes at a time when the cryptocurrency market has been showing some signs of a reversal. Most cryptocurrencies have been losing their momentum and entering a stalemate.
Ethereum burn spike
Ethereum, the second-largest cryptocurrency by market capitalization, is continuing its upward momentum after a massive burning of 18,000 ETH worth $30 million last week. The burn acts as a catalyst for the digital asset, easing the selling pressure and allowing for further price appreciation.
Over the past week, ETH has been moving sideways, consolidating near its current price level. However, it has successfully reversed and gained around 3% in value over the past few days. The Ethereum network has been seeing an increase in activity, with several high-value transactions being recorded, contributing to its positive price performance.
It is worth noting that Ethereum has seen a surge in demand over the past few months, with the recent launch of several DeFi projects on the network driving up its value. With the expected launch of Arbitrum and MATIC zkEVM, and numerous token drops in the near future, there are several catalysts in place to drive further activity and burning on the Ethereum network.