Shiba Inu (SHIB) at a Crossroads: Navigating a Crucial Corrective Phase

Estimated read time 3 min read
  • Shiba Inu (SHIB) is currently in a corrective phase, marked by a long-term descending resistance trend line and a short-term descending parallel channel.
  • Technical analysis shows SHIB’s continuous decline since January, with rejections at the descending resistance trend line causing selling pressure.

Shiba Inu (SHIB), a meme cryptocurrency that has captured the attention of the crypto community, finds itself at a crucial juncture in its market journey. It is currently navigating a corrective pattern, influenced by a long-term descending resistance trend line and a short-term descending parallel channel.

A closer examination of SHIB’s weekly timeframe reveals a consistent downward trajectory that began in January. Throughout this period, SHIB has faced recurring rejections at the descending resistance trend line, with pronounced instances in November, resulting in substantial selling pressure marked by the formation of extended upper wicks.

In a more recent development, November 27 witnessed yet another rejection, intensifying the ongoing decline. Simultaneously, since June, SHIB has adhered to an ascending support trend line, forming a symmetrical triangle in conjunction with the descending resistance line.

Market analysis often relies on momentum indicators such as the Relative Strength Index (RSI) to gauge key aspects of an asset’s performance. For SHIB, the daily RSI currently hovers around 50, indicating an indecisive market sentiment and a lack of clear trend confirmation.

SHIB’s Potential Breakout Scenario

Zooming in on a shorter six-hour timeframe, SHIB is confined within a descending parallel channel, typically associated with corrective movements. This pattern hints at a potential breakout. A notable event within this pattern occurred on November 22 when SHIB rebounded from the 0.618 Fibonacci retracement support level, aligning with the channel’s support trend line. However, a successful breakout from this channel has yet to materialize.

Market analysts like ChartMonkeyBTC anticipate a possible short-term price increase for SHIB, contingent upon a valid breakout from the current resistance trend line. Additionally, recent token burns of 36 million SHIB tokens in the last 24 hours and 320 million in the past week may influence SHIB’s price dynamics.

The outcome of SHIB’s journey through this corrective phase is pivotal. A breakout from the current channel could potentially drive SHIB’s price up by as much as 35%, setting sights on the next resistance at $0.0000105. Conversely, a failure to break out may lead to a 10% decline, targeting the nearest support at $0.0000072. This juncture is of utmost significance for Shiba Inu, shaping its short-term trajectory and drawing the attention of investors and traders within the cryptocurrency market.

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