SHIB’s price broke a long-term descending trend line and horizontal resistance. Weekly outlook is neutral, while daily leans bearish, hinting at a potential decline. Reclaiming the $0.0000095 support could trigger a notable bounce.
On December 17, the Shiba Inu (SHIB) price experienced a breakdown from a short-term continuation pattern. This raises questions about the future direction of SHIB – will it continue to decline, or can we expect a swift recovery?
SHIB Price Dynamics and Token Burns
The weekly analysis of Shiba Inu (SHIB) reveals an upward trend since its low point at $0.0000054 in June. In November, the momentum led to a breakthrough from a descending resistance trend line persisting for 480 days, accompanied by surpassing a horizontal resistance area.
Despite these positive developments, SHIB faced a sharp decline recently, validating the previously mentioned descending resistance trend line. However, the market saw over 12 million SHIB tokens burned in the last 24 hours, marking a substantial increase of over 300% compared to the prior day.
SHIB/USDT Weekly Chart. Source: TradingView
Utilizing the Relative Strength Index (RSI)
Traders often turn to the Relative Strength Index (RSI) to assess momentum and identify potential overbought or oversold conditions. A reading above 50, particularly in an upward trend, is considered favorable for bulls, while a reading below 50 signals the opposite. Notably, the RSI moved above 50 concurrently with the SHIB price breakout, reinforcing the legitimacy of the upward movement.
SHIB Price Analysis: Bearish Signs on Daily Timeframe
Neutral Weekly, Bearish Daily Indicators: While the weekly time frame remains neutral, the daily analysis signals a bearish trend for Shiba Inu (SHIB), evident in both price action and Relative Strength Index (RSI) readings.
Descending Channel and Symmetrical Triangle Breakdown: The price action reveals SHIB trading within an ascending parallel channel since June 2023, typically containing corrective movements. However, a significant bearish signal emerged as SHIB broke down from a symmetrical triangle pattern, suggesting a potential end to the upward trend. The immediate risk is a drop below the minor support level at $0.0000095.
RSI and Potential 20% Decrease: The RSI further supports the bearish sentiment as it recently dropped below 50 and continues to decline. This trend implies a potential 20% decrease in SHIB, with the possibility of reaching the channel’s support trend line at $0.0000075 if the bearish momentum persists.
SHIB/USDT Daily Chart. Source: TradingView
Recovery Scenario: Despite the bearish outlook, reclaiming the $0.0000095 support area could trigger a significant recovery, potentially resulting in a 35% increase to the channel’s resistance trend line at $0.000013.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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