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Technical Analysis

Shiba Inu (SHIB) Price Falls by 23% but Are the Bulls Waiting to Stampede?

2 mins
Updated by Geraint Price

In Brief

  • The Shiba Inu (SHIB) price broke out from a descending resistance line.
  • It is trading inside the $0.0000120 support area.
  • The Shiba Inu (SHIB) price completed a five-wave upward movement.
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The Shiba Inu (SHIB) price is trading inside an important support area that could initiate a bounce. Closing below would harm the bullish potential of the future price.

On Jan.13, the price of SHIB broke through a descending resistance line that had been in place since Aug. 2022. This led to a high of $0.0000157 on Feb. 4. The price also reclaimed an important resistance area at an average price of $0.0000120.

Following the breakout, the daily RSI produced a bearish divergence within overbought territory. Furthermore, the Shiba Inu token price formed a long upper wick. Afterward, a decrease followed, which accelerated on Feb. 9. Now, the SHIB token price is trading inside the $0.0000120 area once more, validating it as support. Since the area also coincides with the descending resistance line, it is a crucial level.

If SHIB price breaks down, it will put the entire upward movement in doubt. In that case, the next closest support area would be at $0.0000102.

Shiba Inu (SHIB) Daily Movement
SHIB/USDT Daily Chart. Source: TradingView

Shiba Inu Price Begins Correction

The technical analysis from the short-term six-hour time frame shows that the SHIB price completed a five-wave upward movement leading to the $0.0000157 high. The defining feature of this move is the triangle that was part of wave four. Moreover, wave five extended and had the length of waves one and three combined (black). 

If the count is correct, the SHIB price is now mired in an A-B-C corrective structure, which could end at the 0.618 Fib retracement support level at $0.0000108. If so, it is currently in the B wave, which will begin in the next 24 hours. Therefore, after an initial bounce, another drop will follow in order to complete the correction. 

After the correction is complete, the SHIB price could increase toward its Aug. 2022 highs at $0.0000175.

A decrease below the yearly lows at $0.0000077 would invalidate this bullish Shiba Inu price forecast. In that case, the SHIB price could fall toward $0.0000050.

Shiba Inu (SHIB) Price Wave Count
SHIB/USDT Six-Hour Chart. Source: TradingView

To conclude, the Shiba Inu analysis suggests that the price is correcting after a month-long upward movement. The trend is still bullish. A decrease below $0.0000077 would invalidate this bullish forecast and could send the price of Shiba Inu toward $0.0000050.

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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.