• After plunging from late fall through the winter, Shiba Inu (SHIB-USD) traded sideways for the past month.
• This may be a sign that Shiba Inu is bottoming out.
• Shiba mania doesn’t appear set to make a comeback; there’s little reason to dive into it today.

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Treading water since March, is now the time to buy Shiba Inu (SHIB-USD)? You may be asking yourself that question as the memecoin favorite has seemingly bottomed out.

There may be less risk now that it gives back more of its gains from its super rally last October and November. Does that mean another hot run is around the corner?

Not so fast. Sure, it’s not only the fact cryptos are seeing renewed interest that’s driving this stabilization of SHIB-USD. There have been some Shiba-specific developments that help to explain its latest price action. However, the key variable needed to send this token to the moon once again isn’t on the table.

Which variable? The type of speculative frenzy that put the memecoin trend on the map last year. Without it, it will be tough for this dog-themed crypto to see yet another significant surge.

Shiba Inu May Have Found a Bottom

Right now, SHIB-USD appears to have found a floor at or near its current price levels. After months of tumbling in price due to the cycling out of risky assets due to the Federal Reserve’s plans to fight inflation with interest rate hikes, the proverbial dust may have finally settled.

The cryptocurrency market overall is starting to recover. Bitcoin (BTC-USD) has erased its 2022 losses. Ethereum (ETH-USD) has erased the lion’s share of its year-to-date losses. Their respective moves make sense, given there’s now more clarity about the Fed’s rate hike plans, as well as more clarity about future regulation of the crypto space by regulators.

A rising tide with crypto is helping all ships, including Shiba Inu. Yet it’s not as if this memecoin is moving higher on external factors alone. Token-specific news has also helped it over the past few weeks. Shiba’s developers have recently unveiled further details about the ecosystem’s metaverse plans. News of increased token burning is helping it out too.

Even so, while these factors are helping to lend support, if you think this is the prelude to another hot run for SHIB-USD, you may be disappointed.

Little to Suggest Mania This Memecoin Is Coming Back

Although now seemingly finding a floor, overall Shiba Inu remains down big from its all-time high. According to CoinMarketCap.com, SHIB is still down 71% from its high-water mark set on Oct 28.

To many, including possibly yourself, this may not be a negative. Even if it makes just a partial recovery, that could mean tremendous upside for those deciding to buy it today. However, before you run out and scoop up a position, keep in mind that the speculative frenzy that fueled its wild moves last year has yet to return.

Yes, lately we’ve seen investors shrug off concerns like inflation and interest rates. That’s why meme stocks, which sold off when the market went into “risk-off” mode late last year, have started to bounce back. But while a move back to “risk-on” has helped cryptos recover, we have not seen a renewal of the frenzy that defined the crypto market during 2021.

Until it arrives, it’s doubtful that Shiba, or any memecoin, will see another major run-up (think triple-digits) in price. Instead, while its core fan base could help it hold steady, as few new fans/speculators dive into it, a partial recovery, much less a full recovery, could remain out of reach.

Crypto Traders Should Stick to Other Plays

As has been the case since it first hit the scene, the main appeal of SHIB-USD is the potential for profit if Shiba mania resumes. Right now, however, it doesn’t appear that’s on the horizon. While lending it support, recent developments are helping to spark another wave.

Based on recent price action with major cryptocurrencies, the digital asset space may be thawing out of its so-called winter. There may be merit in entering/adding to positions in established coins like BTC and ETH, or in up-and-coming altcoins with high utility.

The takeaway is clear. Traders should stick to cryptos that will move higher on both market sentiment shifts and on their respective fundamentals. In other words, avoid Shiba Inu. Speculative frenzy, which isn’t on the horizon, and at the same time is tough to anticipate, is the only thing that can move it materially higher.

On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.