The Shiba Inu course failed to take advantage of the recent haip around memcoins. SHIB has been in a downtrend since reaching a local peak of $0.00001575 in February 2023. Perhaps a bullish pattern could push the price higher
The second-largest memcoin by market capitalization has reached a long-term support area that could initiate a rebound and a potential trend reversal. In order for this to happen, SHIB must form a rare “triple bottom” pattern on the weekly chart and engage a bullish divergence on the daily RSI.
In order for this to happen, SHIB must form a rare “triple bottom” pattern on the weekly chart and engage a bullish divergence on the daily RSI.
Triple bottom for SHIB
The popular meme coin SHIB, created by the Shiba Inu project, is an ERC-20 format token and one of the main rivals of Dogecoin.
As technical analysis shows, the price of Shiba Inu hit an all-time high (ATH) of $0.00008854 in November 2021. It has since declined and bottomed at $0.00000714 in June 2022.
SHIB has reached this support area (green) three times in the last year. The second time was in December 2022, and the third time is now. Currently, the token is 91% below its ATH and is again approaching the macrodynomial of a year ago.
The token is currently 91% below its ATH and is approaching the macrodynomial of a year ago.
However, re-visiting the long-term support area is a bullish signal that could potentially trigger a resumption of the uptrend. If support initiates a bounce, a triple bottom pattern (blue arrows) may form on the chart. The occurrence of this pattern on the weekly chart makes it even rarer.
In this case the nearest target would be $0.00000963, the Fibo level of 0.236 retracement and the horizontal support/resistance line (red).. Next, the bulls might want to return to $0.00001080 (the Fibo retracement level of 0.382).
Fibonacci levels are traditionally regarded as the most likely placeholders for stopping and reversing the price after a significant advance in any one direction. As expected, at these levels, the market can win back some of the distance traveled and only then resume the movement in the original direction. In addition, they can determine the limits of the price movement.
Source: TradingView
But if SHIB loses this long-term support, it will fall to new cyclical lows. Then the July 2021 weekly closing candle at $0.00000630 could provide support.
Bullish divergence in the daily RSI
An analysis of the daily Shiba Inu timeframe shows a clear downtrend. It has been in place since it peaked locally at $0.00001575 in early February 2023. SHIB later formed three consecutive lowering highs (LH) and three lowering lows (LL).
The decline in SHIB price was accompanied by a decline in the Relative Strength Index (RSI).. It is a momentum indicator indicating overbought/oversold and bullish/bearish market sentiment, depending on whether it is above or below the 50 mark. It is currently holding below the 50 level, confirming the downtrend.
Between the last two lows, however, a bullish RSI divergence appeared on the chart. This means that despite the fall in SHIB price, the corresponding RSI began to rise (blue lines).
However, the indicator has already formed two such bullish divergences. This suggests that a strong price rebound may be on the way.
In the meantime, the market has been trying to rebound, which is a sign that a strong price rebound may be coming.
Source: TradingView
If the bullish Shiba Inu pattern is indeed confirmed, the price could rise to at least the aforementioned resistance at $0.00000963.
On the one hand, this could be a bearish retest of the previous bearish breakout zone. On the other hand, the price of SHIB may form the first uptrend in 5 months, which could be the beginning of an uptrend.