Shiba Inu Price Surges, Eyes New Heights After 2-Month Slump

After enduring a prolonged downtrend spanning two months, the Shiba Inu (SHIB) price has finally broken free. A thorough examination of both the daily and weekly (SHIB/USD) charts reveals several crucial technical factors dictating SHIB’s recent price action.

Bullish Momentum Builds

On the daily chart, SHIB has smashed through the upper boundary of a descending channel pattern that had constrained it since mid-December last year. This pattern, characterized by diminishing highs and lows, was a persistent force until a surge in volume and buying pressure shattered its confines. The breakout was solidified by a close above the 200-day Exponential Moving Average (EMA, depicted in blue), now serving as a support level. However, the convergence of the 20-day, 50-day, and 100-day EMAs just above current price levels (ranging between $0.00000912 and $0.00000932) suggests that bulls still face some hurdles.

Notably, Fibonacci retracement levels drawn from the recent significant move’s peak to trough unveil key price levels. These include the 0.236 level at $0.00000878, a crucial support, followed by resistance levels at the 0.382 level ($0.00001050), the 0.5 level ($0.00001189), and the 0.618 level ($0.00001328). These levels often pose resistance during recoveries and are vital targets for traders.

Meanwhile, the Relative Strength Index (RSI) on the daily chart hovers around the 51 mark, signaling neutral momentum with a slight inclination towards buying pressure. This leaves room for further RSI ascent before entering overbought territory, typically above the 70 level.

Potential End of Consolidation Phase?

On the weekly timeframe, a larger trend line derived from an ascending triangle pattern provides critical support, hinting at a longer-term bullish sentiment amidst recent bearish activity. A decisive weekly close above the 20-week EMA at $0.00000904 this Sunday could fuel significant momentum, with attention shifting to the 50-week EMA at $0.00000970, indicating potential further advances.

The volume profile on both time frames has surged during the breakout, further validating the move. However, traders should exercise caution as high volume may precede volatility and possible price retracements.

In conclusion, SHIB has successfully broken free from a two-month downtrend, with clear support and resistance levels delineated by EMAs and Fibonacci retracements. Traders and investors must monitor these levels closely to assess the breakout’s sustainability and potential for a trend reversal.