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Dogecoin (DOGE) and Shiba Inu (SHIB) Set Bull Trap Before Steep Correction

2 mins
Updated by Geraint Price
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In Brief

  • DOGE is trading inside a long-term descending wedge.
  • It is facing resistance at $0.075.
  • SHIB is trading inside a short-term ascending parallel channel.
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Dogecoin (DOGE) has deviated above an important resistance area before falling below it. On the other hand, Shiba Inu (SHIB) has managed to successfully move above its own resistance area.

DOGE

DOGE has been falling inside a descending wedge since June 2021. The wedge is considered a bullish pattern, meaning that an eventual breakout from it would be likely.

So far, both the resistance (red icons) and the support line (green icons) of the wedge have been validated numerous times. Most recently, the price validated the resistance line on Aug 16 and has been decreasing since.

DOGE Wedge
DOGE/USDT Chart By TradingView

A closer look at the DOGE movement supports the possibility that the price will decrease.

The main reason for this is the deviation and subsequent decrease below the $0.075 area. Now, the area is expected to act as resistance once more.

Furthermore, DOGE is trading in the lower portion of an ascending parallel channel, which usually contains corrective movements. The previously outlined $0.075 resistance area coincides with the middle of the channel, increasing its potency.

So, despite the fact that the previously outlined wedge is considered a bullish pattern, a decrease toward its support line seems to be more likely than an eventual breakout. 

A breakdown from the channel would confirm this possibility while an increase above $0.075 would suggest that a breakout is instead more likely.

DOGE Channel
DOGE/USDT Chart By TradingView

SHIB

SHIB has also been increasing inside an ascending parallel channel since June 18. However, unlike DOGE, it has managed to break out above its own resistance at $0.0000125 and validate it as support afterward. 

Currently, SHIB is attempting to move above the middle of its ascending parallel channel. If it is successful in doing so, the next resistance would be at $0.0000175, also coinciding with the resistance line of the channel.

The daily RSI is currently right at the 50 line, providing a fairly neutral assessment. 

So, whether SHIB breaks out or down from the channel and its horizontal areas in the process will likely determine the direction of the future trend.

SHIB Channel
SHIB/USDT Chart By TradingView

For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here

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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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