Shiba Inu SHIB cryptocurrency token symbol of the DeFi project in circle with PCB tracks on gold background. Currency icon. Decentralized finance programs. Vector EPS10.
- SHIB has formed a bullish triple bottom pattern, indicating a possible reversal of its downtrend
- However, SHIB also faces a bearish descending triangle pattern, which could signal a further decline to new lows
Shiba Inu’s Price Hangs By A Thread
Shiba Inu (SHIB), the meme-inspired cryptocurrency that gained popularity after being endorsed by Elon Musk, is in a critical situation. The coin has been in a downtrend since its all-time high of $0.0000388 in May 2021, losing over 80% of its value. However, it has also shown signs of resilience, bouncing off a crucial support level of $0.00000715 three times in the past year.
This support level is the key to SHIB’s future, as it marks the boundary between two conflicting chart patterns: a bullish triple bottom and a bearish descending triangle. These patterns are formed by connecting the highs and lows of SHIB’s price action with trend lines, as shown in the chart below.
A Tale Of Two Patterns For Shiba Inu
A triple bottom is a bullish reversal pattern that indicates that the sellers are losing strength and the buyers are gaining momentum. It consists of three roughly equal lows that bounce off a horizontal support line, followed by a breakout above a resistance line that connects the highs of the pattern. For SHIB, the resistance line is at $0.0000125, which coincides with the 50-week moving average.
A descending triangle is a bearish continuation pattern that suggests that the sellers are still in control and the buyers are losing interest. It consists of a series of lower highs that form a downward sloping resistance line and a horizontal support line that acts as the floor for the price. For SHIB, the support line is the same as the one for the triple bottom.
The two patterns have opposite implications for SHIB’s price direction. If SHIB breaks above the resistance line of the triple bottom, it could trigger a bullish rally towards higher levels. The target for this scenario can be calculated by measuring the height of the pattern and adding it to the breakout point. For SHIB, this would imply a potential surge of about 250% to $0.00002545, which is also near the 23.6% Fibonacci retracement level of the downtrend.
However, if SHIB breaks below the support line of the descending triangle, it could confirm a bearish trend continuation towards lower levels. The target for this scenario can be calculated by measuring the height of the pattern and subtracting it from the breakdown point. For SHIB, this would imply a possible drop of about 15% to $0.0000060, which is also its year-to-date low. If this level is breached, SHIB could plunge into uncharted territory and make new all-time lows.
To confirm either scenario, traders often look for additional signals from other technical indicators, such as the Relative Strength Index (RSI). The RSI measures the momentum of price movements and ranges from 0 to 100. A value above 70 indicates overbought conditions, while a value below 30 indicates oversold conditions. For SHIB, the weekly RSI is currently at 39.8, which is neutral. However, it recently dipped below 30, suggesting that SHIB was oversold and due for a bounce.
Therefore, SHIB’s fate depends on whether it can sustain above or below the $0.00000715 support level in the coming days and weeks. This level will determine whether SHIB will break out or break down from its conflicting chart patterns and set its course for either a bullish rally or a bearish decline.
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