The Shiba Inu (SHIB) price recently bounced, confirming a horizontal support area. Now the question is whether SHIB can sustain this bounce and break out from its corrective pattern or if more downside will follow.
Shiba Inu Breakout and Retest
On the weekly timeframe, SHIB experienced a decline below a descending resistance trend line that started in August 2022. However, it has since shown resilience and recovered. In December, SHIB finally broke through the descending resistance trend line that had been in place for over 480 days. After reaching a peak post-breakout, the price declined but then confirmed the former resistance line as support before rebounding.
Bullish Momentum Indicator
Traders often use the Relative Strength Index (RSI) as a momentum indicator to determine if a market is overbought or oversold. Currently, the RSI for SHIB is above 50, indicating a bullish trend.
SHIB Price Prediction: Bounce or Breakdown?
The daily chart also leans bullish. Although SHIB fell after being rejected by the resistance trend line of an ascending parallel channel, it found support above a horizontal support area and created a bullish candlestick. The bounce confirmed the $0.000009 level as support, and now SHIB is attempting to move above the channel’s midline. However, the daily RSI has not yet moved above 50 to confirm the bullish trend.
Accelerated Token Burn
The team behind SHIB continues to burn tokens at an accelerated rate, with over 36 million tokens burned in the past 24 hours. If SHIB moves above the channel’s midline, it could increase by 28% to reach the resistance trend line at $0.000012. However, if it closes below the $0.000009 support area, it could fall by 23% to reach the channel’s support trend line at $0.000008.
Hot Take: SHIB’s Price Bounce Indicates Potential for Upside
Despite recent price fluctuations, the bounce off the support area suggests that SHIB has the potential for upside. However, it is important to monitor key levels and indicators, such as the RSI, to confirm the bullish trend. Additionally, the accelerated token burn could have an impact on SHIB’s price in the near future. Keep an eye on how SHIB performs relative to its breakout and support levels to make informed investment decisions.
Disclaimer: This article is for informational purposes only and should not be considered financial or investment advice. Always conduct your own research and consult with a professional before making any financial decisions.
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