The Shiba Inu (SHIB) price fell sharply after a resistance trend line rejected it on December 17.
The SHIB price has regained its footing since and trades above a pivotal horizontal area. Can it muster a final push to end the year?
Shiba Inu Consolidates Above Resistance
The Shiba Inu price has increased since falling to a low of $0.0000054 in June. The price created a higher low in October (green icon) and accelerated its rate of increase afterward.
Last week, the SHIB price reached a high of $0.0000119, moving above a long-term horizontal resistance area. However, it failed to sustain the increase, creating a long upper wick (red icon).
This took SHIB back to the horizontal area, which has intermittently acted as support and resistance since May 2022.
When evaluating market conditions, traders use the RSI as a momentum indicator to determine whether a market is overbought or oversold and whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is upward, bulls still have an advantage, but if the reading is below 50, the opposite is true.
The weekly RSI is above 50 and increasing, both signs of a bullish trend.
Read More: 11 Best Shiba Inu (SHIB) Wallets in 2023
SHIB Price Prediction: Breakout or Rejection?
While the weekly time frame chart is leaning bullish, the daily one suggests that an initial decrease is likely before the price can resume its upward movement. This is because of the price action and the RSI.
The price action shows that the SHIB price has traded inside an ascending parallel channel since June. Such channels often contain corrective movements.
SHIB reached the channel’s resistance trend line on December 17 (red icon) and was rejected, creating a bearish candlestick.
The rejection was combined with a bearish divergence in the RSI (green), which often precedes bearish reversals.
If the SHIB price continues to fall, it can decrease by another 12% and reach the closest support at $0.0000095.
Despite this bearish short-term SHIB price prediction, a breakout from the channel will mean the correction is complete and can lead to a 40% increase to the next resistance at $0.0000150.
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