The Shiba Inu Breakout: Will it Continue?
The price of Shiba Inu (SHIB) has recently broken out from a short-term channel, preventing it from reaching a new yearly low. However, the question remains: will this breakout continue or will the price reverse downwards once again?
SHIB Decreases Toward Yearly Lows
Looking at the weekly timeframe technical analysis for Shiba Inu, we can see that the price has been falling under a descending resistance trendline since August 2022. This trendline caused a rejection in August 2023, leading to a subsequent decline in price. This week, SHIB reached a low of $0.0000066.
Validation Needed for Support Line
Although the Shiba Inu price may be trading within a descending wedge, its support line still needs to be validated multiple times. Currently, the closest horizontal support area is at $0.0000060.
Bearish Reading from RSI
The Relative Strength Index (RSI), an important indicator for traders, currently shows a bearish reading for SHIB. Typically, if the RSI reading is above 50 and trending upward, bulls have an advantage. Conversely, if the reading is below 50, the trend is unfavorable. In the case of SHIB, the RSI was rejected at 50 and continues to decline.
Shiba Inu Breakout – Is a Reversal Imminent?
On the daily timeframe analysis, a bullish reading is observed. SHIB had been trading within a descending parallel channel since August 14. These channels often indicate corrective actions and suggest that a breakout is imminent. After five unsuccessful attempts, SHIB finally broke above the trendline on October 22. Coupled with the RSI increasing above 50, this breakout appears legitimate and could lead to further price increases.
Potential Increase or Decrease in Price
If the upward movement continues, the Shiba Inu price could potentially increase by 30% and reach the next resistance level at $0.0000095. However, it’s important to note that falling below the channel’s resistance trendline would invalidate the breakout, leading to an expected 16% drop to the $0.0000060 area.
Hot Take: The Future of SHIB
The recent breakout from the short-term channel has provided some relief for Shiba Inu, preventing it from hitting new yearly lows. While there are bullish signs, such as the breakout and the RSI increasing above 50, it’s important to remain cautious. The SHIB price still needs to validate its support line and overcome long-term resistance levels. Traders should closely monitor the price action and technical indicators to gauge the likelihood of a sustained upward movement or a reversal back towards yearly lows.
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