It appears that the relief rally for Shiba Inu (SHIB) may have come to an end and the coin is now in its final corrective wave, according to market analysis. A bearish breakout from the short-term channel would confirm this prediction and indicate a further decline in price.
On February 4, SHIB reached its peak price of $0.0000157 before beginning a downward trend that has continued since then. This decline was attributed to a bearish divergence in the daily RSI (green line) based on technical analysis of the daily chart.
However, the coin has since recovered from its drawdown and is currently trading above the $0.0000120 support level. This is a critical level for SHIB, having alternated between acting as resistance and support over the past six months. The daily RSI is currently in the neutral 50 region, indicating a neutral trend.
The future direction of the Shiba Inu trend will depend on whether the coin’s price can close below the $0.0000120 support level or rebound from it. A close below this level could see the price decline further towards $0.0000102, while a rebound could lead to a rise in price towards highs around $0.0000157.
Source: Trading View
To better predict the market trend, a shorter timeframe could be useful, and it appears to confirm the bearish forecast for the Shiba Inu (SHIB) token. A closer look at the 6-hour chart reveals that SHIB is more likely to experience a fall, having completed a five-wave bullish structure that peaked at $0.0000157. The wave analysis shows that a triangle formed wave 4, followed by a sharp decline.
After reaching the peak, SHIB experienced a sharp decline to $0.0000117, followed by a rebound. The long lower wick (green icon) that formed during the decline confirmed support at the Fibo 0.5 retracement level (white). This level coincides with the horizontal support area mentioned earlier, making it an essential support area. This support area most likely marked the bottom of the corrective wave A.
Source: Trading View
If this analysis is accurate, then SHIB’s price should now be in the middle of wave C of the ABC correction structure, with the entire correction possibly ending around the Fibo level of 0.5 at $0.0000118. This would also mean that the ratio of waves A:C is 1:0.618, which is typical for such corrections. After correction, SHIB could start a new growth phase.
However, this bullish scenario would be neutralized if SHIB absorbs the lows of the year by $0.0000077, leading to the loss of the strong support area at $0.0000102. In this case, the price could drop to $0.0000050.