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Shiba Inu (SHIB) Price Locked in a Corrective Pattern – Will It Break Out?

2 mins
Updated by Ryan James
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In Brief

  • The Shiba Inu (SHIB) price is decreasing under a long-term descending resistance trend line and a short-term descending parallel channel.
  • The daily Relative Strength Index (RSI) and the shorter-term price action both give mixed signs, failing to confirm the SHIB trend's direction.
  • Whether the SHIB price breaks out from the channel or gets rejected will determine if the SHIB price will increase or fall in the short-term.
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The Shiba Inu (SHIB) price made a failed breakout attempt on November 27 and has fallen since.

Despite the decrease, SHIB still trades inside a corrective pattern. Will it break out?

Shiba Inu Fails to Break Out

The weekly timeframe technical analysis shows that Shiba Inu has decreased since January. The decrease has been contained under a descending resistance trend line.

Until now, the trend line has caused numerous rejections, three of which are in November (red icons). The rejections created long upper wicks, considered signs of selling pressure.

The SHIB price has fallen since the most recent rejection on November 27.

Since June, the SHIB price has also followed an ascending support trend line, which creates a symmetrical triangle when combined with the aforementioned resistance.

SHIB Price Movement
SHIB/USDT Daily Chart. Source: TradingView

With the Relative Strength Index (RSI) as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.

Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true. The daily RSI is at 50, failing to confirm the trend’s direction.

SHIB Price Prediction – When Will Breakout Transpire?

The six-hour timeframe chart shows that the SHIB price has decreased inside a descending parallel channel since November 11. Such channels usually contain corrective movements, meaning that an eventual breakout from the pattern will be likely.

On November 22, SHIB bounced at the 0.618 Fib retracement support level, which also coincided with the channel’s support trend line. However, the SHIB price failed to break out from the channel.

Cryptocurrency trader ChartMonkeyBTC believes that the SHIB price will increase significantly in the short-term. He stated that:

Price is showing resistance at the red trend line. After valid breakout, a 100%+ profit is possible. Trade based on own discretion.

It is also worth noting that 36 million SHIB tokens were burned during the past 24 hours, while 320 million over the past seven days. Whether the SHIB price breaks out from the channel or gets rejected will likely determine the future trend’s direction.

SHIB Price Prediction
SHIB/USDT Six-Hour Chart. Source: TradingView

A breakout from the channel can lead to a 35% SHIB price increase, reaching the next resistance at $0.0000105. On the other hand, failure to do so will lead to a 10% drop to the closest support at $0.0000072.

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For BeInCryptos latest crypto market analysis, click here.

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Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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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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