The Shiba Inu (SHIB) price has fallen since December 17, 2023. The decrease accelerated on January 3 this year.
Despite the drop, SHIB managed to save a breakdown from a critical horizontal support area. Will it continue recovering?
Shiba Inu Fails to Clear Resistance
The weekly time frame chart shows that the SHIB price has fallen since January 2023 and traded below a horizontal resistance area since April. The downward movement culminated with a low of $0.0000060 in June.
While Shiba Inu increased afterward, it failed to break out from the horizontal resistance area. Rather, it was rejected twice, creating long upper wicks each time. Such wicks are considered signs of selling pressure.
The SHIB price fell sharply this week but created a long lower wick (green icon) and has recovered during the past two days.
The RSI is a momentum indicator traders use to evaluate whether a market is overbought or oversold and whether to accumulate or sell an asset. Readings above 50 and an upward trend suggest that bulls still have an advantage, while readings below 50 indicate the opposite. The weekly RSI gives a mixed reading since the indicator is falling but is still above 50.
Read More: 11 Best Shiba Inu (SHIB) Wallets in 2023
SHIB Price Prediction: Is the Trend Bullish or Bearish?
Similarly to the weekly time frame, the daily one gives a neutral outlook. This is because of mixed readings from the price action and the RSI.
The price action suggests that the SHIB price has traded inside an ascending parallel channel since June 2023. Such channels usually contain corrective movements. More recently, SHIB was rejected by the channel’s resistance trend line on December 17 (red icon) and has fallen since.
While the decrease led to a low of $0.0000082 on January 3, 2024, the price bounced afterward, saving a breakdown from the $0.0000096 support area.
It is also worth mentioning that more than 5 million tokens were burned in the past 24 hours.
Despite this bounce, the daily RSI fell below 50, a sign of a bearish trend. Therefore, whether SHIB bounces at the $0.0000096 area or breaks down can determine the future SHIB price trend.
A bounce can lead to a 25% increase to the channel’s resistance trend line at $0.0000120, while a breakdown could cause a 25% drop to the support trend line at $0.0000078.
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