A potential double-bottom pattern formation near the lower boundary of the Shiba Inu price chart indicates a bullish reversal may be imminent if confirmed. Shiba Inu (SHIB) suffered a steep correction during the August 4 market crash. Despite a subsequent recovery, SHIB struggles to reclaim its previous highs as market sentiment remains cautious. SHIB price dropped by 2.5% on Wednesday, but on-chain metrics signal a bullish trend may be forming. The Shiba Inu chart suggests a possible double-bottom formation that could reverse the current downtrend.
Shiba Inu Price Poised for Breakout
The SHIB price chart currently shows a falling channel, indicating a persistent downward trend. Recently, the price tested the lower boundary of this channel, suggesting a potential short-term reversal or continuation of the downtrend depending on upcoming price action.
Immediate resistance levels include the 50-day EMA at $0.00001718 and the 200-day EMA at $0.00001855, with the latter being more significant due to its long-term relevance. The upper boundary of the descending channel, around $0.000015, also serves as resistance.
Conversely, the lower boundary of the channel, around $0.000011, provides key support. A break below this level could lead to a drop to the next significant support at $0.000008, based on previous consolidation levels.
Recent candlesticks near the lower channel boundary suggest a potential double-bottom pattern, which is a bullish reversal indicator. If confirmed, SHIB could rally to $0.00001855, and if this resistance is surpassed, the price might climb higher to $0.00002748.
Technical Indicators
Relative Strength Index (RSI): Currently at 31.47, near oversold territory, indicating the asset might be undervalued in the short term and potentially poised for a bounce or reversal.
Chaikin Money Flow (CMF): At 0.07, indicating a slight positive money flow, suggesting some buying interest is building.
A price breakout above $0.000014 and a close above the 50-day EMA may signal market strength, turning SHIB bullish. The next price target would be around $0.00001855, aligning with the 200-day EMA and the upper boundary of the channel.
On-Chain Analysis Supporting Inbound Rally
Data from Shibarium Scan, the official Shiba Inu Chain explorer, shows that new accounts on the network hit an all-time high on August 6, signaling increasing adoption levels, which typically translate into bullish sentiment for SHIB. According to IntoTheBlock data, SHIB saw an increase in large transactions on August 5, indicating heightened whale activity. Although this spike dropped on August 6, it remains higher compared to the previous week.
Increased whale activity, coupled with rising Shiba Inu prices, signals renewed interest in the asset. This renewed interest could drive a subsequent price increase. An accompanying volume increase would further strengthen the signal for a potential reversal.
Conclusion
Overall, the technical and on-chain metrics indicate a potential bullish reversal for Shiba Inu. Investors and traders should watch for key resistance levels and market conditions to gauge the likelihood of a sustained upward movement. If the bullish patterns hold, SHIB could see significant gains in the near term.
Notice:
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