Market enters reversal mode, but some questions remain
Shiba Inu is currently showing a descending triangle pattern on its trading chart, a development that could redefine its market behavior in the coming weeks. This pattern is important because it often signals a potential continuation or reversal, and for SHIB, the risk is particularly high.
A descending triangle has been forming over the past few months, characterized by lower highs and a flat support line. This pattern suggests that each bounce is met with strong selling pressure, gradually pushing the price down. Currently, SHIB is hovering around the $0.0000237 mark, with an immediate support at $0.000021.
SHIB/USDT chart (courtesy of TradingView)
If this support fails, SHIB could fall further towards $0.00002, a key psychological and technical barrier. The outcome at this point could lead to two different scenarios: a rebuttal, where buyers step in strongly and push the price higher, potentially retesting higher resistance levels; or a breakdown, where the price could fall below the $0.00002 mark, triggering bearish consequences for the coin.
A break below the triangle could severely undermine confidence, leading to a potential sell-off. Conversely, a strong rebuttal and recovery of the support line could reignite interest and potentially start a new bullish cycle for SHIB.
Volume trends and market sentiment will play a key role in determining the outcome. Volume has been relatively low recently, which often indicates a lack of confidence among traders.
Testing Bitcoin
Bitcoin is testing the 26-day exponential moving average (EMA), and there is significant resistance that BTC is having trouble surpassing. This resistance could eventually push Bitcoin’s price lower, potentially targeting the $58,000 support level.
The $58,000 mark is significant because it has previously served as a strong support level for Bitcoin. Observers note that the price is also close to the 100-day moving average, which is around $60,000, adding an extra layer of psychological and technical significance. These EMAs are crucial in defining medium- to long-term market trends and sentiment, and their current levels suggest a bearish outlook for the cryptocurrency.
Volume analysis shows that the volume is somewhat neutral and declining, which does not indicate a strong potential for a bullish reversal at the moment. Usually, bullish reversals are accompanied by a large increase in volume, indicating strong buying interest that could push prices higher. The lack of such volume dynamics suggests that the market may not be ready to push prices back above the $60,000 mark.
Additionally, Bitcoin’s failure to break above the 26 EMA and 50 EMA also added to the bearish sentiment among traders. These failures are crucial as they often indicate which way the market might be heading in the short term.
Cardano’s neutral stance
After a period of volatility, Cardano is showing signs of a flattening trend. Recently, ADA’s price action has leveled off, indicating a potential stabilization phase that could set the stage for future moves.
Currently, ADA is hovering around the mid-April support level and has tested it multiple times without making a decisive breakthrough. This support level has proven to be resilient, suggesting that it could serve as a solid basis for a potential upward rebound.
However, during the last rally to the local resistance at $0.51, ADA failed to break out and faced a downturn affected by a bearish crossover of the 50-day and 100-day exponential moving averages. Such a crossover is often interpreted as a sign of accelerating negative trends in the market.
Following this bearish indicator, Cardano's price action has weakened somewhat, with no clear signs of a bullish reversal in the short term. Considering the current market conditions and technical setup, the most likely scenario for ADA is the continuation of the sideways trend. This would cause the price to oscillate between known support and resistance levels without clear directional momentum.
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