After Shiba Inu (SHIB) had a fabulous rally at the beginning of the year, the price has been in a sustained downturn since February 5, which neither the beta launch of Shibarium nor an increase in monthly burn rates were able to prevent. With the price currently trading at $0.00000804, SHIB is thus at possibly the most important point in its young history.
A look at the 1-day chart reveals that SHIB reached a local high of $0.00001575 on February 5, 2023. From that point until early May, the price formed a descending triangle with a horizontal trend line at $0.000010 acting as support for a long time. This price level was also aligned with the 23.6% Fibonacci level.
Most Important Moment In Shiba Inu Price History?
When the trend line was broken to the downside, the downtrend continued rapidly. All year-to-date gains were wiped out. However, one last hope may now be a triple bottom chart pattern, which the Shiba Inu price is currently exhibiting.
The price area at $0.00000776 served as the last support back in mid-June 2022 and late December 2022, and now again. Shiba Inu meets all three characteristics of the chart pattern.
First, the three lows must be roughly equal in price and spaced apart by a certain distance (June and December 2022, June 2023). Second, volume must be decreasing throughout the pattern, which is a sign that the bears are losing strength. Looking at the time pattern of SHIB trading volume, this condition can also be considered to be met.
Third, Shiba Inu has been in a steady downtrend with lower highs since the all-time high of late October 2021. Hence, the decisive moment might have come now: While the trading volume decreases during downward movements, the volume should increase during upward movements when the price breaks through the resistance levels. Only if that happens, a trend reversal seems possible.
A very first resistance to break through is at $0.0000817. If successful, the 50-day Exponential Moving Average (EMA) currently at $0.00000907 could come into focus. However, probably the most important resistance to confirm a fake breakout is the 23.6% Fibonacci level at $0.000010.
The bullish case of Shiba Inu is also supported by a possible bullish divergence of the RSI in the 1-day chart. This occurs when the RSI indicates an oversold condition (SHIB’s RSI dropped as low as 24 in May), followed by a higher low associated with lower price lows.
Thus, the RSI of Shiba Inu price in the 1-day chart could indicate bullish momentum. The break above the oversold zone in recent days could be a signal for a new buy position. But the bearish case is still strong as well.
SHIB traders do not want to see a drop below $0.00000716 at any cost. If this happens, it would be an alarming signal that SHIB could test the September 2021 low around $0,000006.
Featured image from iStock, chart from TradingView.com
