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Shiba Inu, Bonk, and Pepe rise could be a dead cat bounce
Meme coins like Shiba Inu, Pepe, and Bonk also likely jumped as crypto investors bought the dip after they dropped for three consecutive days.
A potential risk for the ongoing rebound is that this could be a dead cat bounce. A DCB is a situation where falling asset prices stage a brief rebound and then resume the downward trend.
For example, Shiba Inu dropped by 15% on Dec. 9 and by 1% on the following day. It then formed a DCB by rising by 6% on Dec. 11 and then resumed its downtrend, reaching a low of $0.00001855 on Dec. 20.
The other potential risk for these coins, especially Shiba Inu, is that some of them have formed a head and shoulders chart pattern.
An H&S pattern is a popular bearish reversal sign made up of a head, two shoulders, and a neckline, which is at $0.00002280. That is a sign that the coin may continue the downtrend.
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