Shiba Inu might be gearing up for a significant price rally, according to recent insights from market analyst CryptoCheck. The analysis, which focuses on several technical indicators, suggests that the token may be positioned for an upward movement, particularly as Bollinger Bands on the 1-day chart show signs of contraction. This phenomenon often precedes sharp price movements, hinting at a possible breakout.
Key Resistance Levels to Watch
Before delving into the details of market indicators, it’s crucial to note the significance of a key resistance level that SHIB must overcome. The token’s price is currently testing a trendline that has acted as prolonged resistance. According to CryptoCheck, breaking above this trendline would be pivotal.
A close above this line could confirm a bullish breakout, signaling a strong buy opportunity. However, if SHIB fails to surpass this resistance, it could invalidate the current setup, halting SHIB’s bullish potential.
Tightening Bollinger Bands
One of the primary indicators CryptoCheck analyzed is the Bollinger Bands contraction on the Shiba Inu chart. Bollinger Bands measure market volatility, and tightening bands typically signal a consolidation phase. This is often followed by a significant price swing in either direction once volatility returns to the market.
In the case of Shiba Inu, the bands have contracted to an unusually tight range, which historically suggests that a breakout is near. XRP is also witnessing a similar phenomenon, suggesting a broader market trend and potential breakouts for multiple cryptocurrencies with tightening Bollinger Bands.
Relative Strength Index (RSI) and Market Sentiment
The analysis also highlights Shiba Inu’s Relative Strength Index (RSI), which has recently reached its lowest point this year. The RSI is a key tool used to measure the momentum of price movements and identify when an asset is overbought or oversold.
SHIB’s current RSI indicates the token is in oversold territory, a condition that often triggers a reversal as buyers begin to re-enter the market. A prolonged stay in the oversold area usually precedes a massive rebound, supporting the bullish sentiment surrounding SHIB.
More Signs of Strength
Adding further weight to a potential price increase is the V-shaped recovery pattern recently observed on SHIB’s 4-hour chart. This pattern became evident when Shiba Inu’s price fell from $0.00001726 on July 3 to $0.00001266 on July 5, only to recover sharply above $0.000017 by July 7.
CryptoCheck points out that this V-shaped recovery indicates strong market support for SHIB at lower levels. Buyers acted fast when SHIB’s price fell. This shows it could easily maintain higher support levels as it climbs.
⚠️Disclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
