- Shiba Inu (SHIB) is currently in a corrective pattern, struggling under a long-term descending resistance trend line and a short-term descending parallel channel.
- The outcome of SHIB’s current pattern, whether a breakout or further decline, will significantly impact its short-term price direction.
Navigating Through a Corrective Phase
Shiba Inu (SHIB), a popular meme cryptocurrency, is currently experiencing a critical phase in its market journey. The asset is locked in a corrective pattern, fluctuating under the influence of a long-term descending resistance trend line and a short-term descending parallel channel.
Technical Indicators and Market Sentiment
Analyzing the weekly timeframe, SHIB has been on a downward trajectory since January, consistently facing rejections at the descending resistance trend line. These rejections, particularly evident in November, have led to significant selling pressure, as indicated by the formation of long upper wicks.
In a more recent development, the SHIB price encountered another rejection on November 27, resulting in a continued decline. Concurrently, since June, SHIB has been following an ascending support trend line, forming a symmetrical triangle in conjunction with the descending resistance line.
The Role of the Relative Strength Index (RSI)
The Relative Strength Index (RSI) serves as a key momentum indicator for traders, helping determine market conditions, such as overbought or oversold states, and guiding investment decisions. For SHIB, the daily RSI hovers around 50, reflecting an indecisive market sentiment and failing to confirm a clear trend direction.
SHIB’s Potential Breakout Scenario
On a shorter six-hour timeframe, SHIB is observed within a descending parallel channel, which typically encompasses corrective movements. This pattern suggests a potential breakout. A notable point in this pattern occurred on November 22, when SHIB bounced at the 0.618 Fibonacci retracement support level, aligning with the channel’s support trend line. However, SHIB has yet to achieve a successful breakout from this channel.
Predictions and Token Burn Impact
Some traders, such as ChartMonkeyBTC, foresee a potential short-term increase in SHIB’s price, contingent upon a valid breakout from the current resistance trend line. Additionally, the recent burning of 36 million SHIB tokens over the last 24 hours and 320 million in the past week could influence the asset’s price dynamics.
A Decisive Moment for SHIB
A breakout from the current channel could propel SHIB’s price by up to 35%, targeting the next resistance at $0.0000105. Conversely, a failure to break out may result in a 10% decline to the nearest support at $0.0000072. This pivotal moment for Shiba Inu will likely determine its short-term trajectory, making it a critical watch for investors and traders in the cryptocurrency market.