• SHIB price may be in the process of framing a descending triangle pattern.
  • 50 one-hour simple moving average (SMA) has begun to provide resistance over the last 24 hours.
  • Volume has notably declined today, characteristic of descending triangle patterns.

SHIB price has been consolidating today after the significant decline related to Vitalik Buterin’s decision to donate $1 billion worth of Shiba Inu to the India COVID Relief Fund. The emerging descending triangle projects lower prices for Shiba Inu moving forward.

SHIB price jitters are part of the bottoming process

A descending triangle is a bearish pattern and follows an established trend, albeit short in the case of Shiba Inu. However, as long as the pattern is robust, it can be used to anticipate price moves.

To be specific, there must be two reaction lows at the horizontal trend line, but the lows do not have to be exact, but within reasonable proximity of each other, as is the case with Shiba Inu. It is better if there is some space between the lows and a reaction high between them. There must also be two reaction highs at the descending trend line, and the highs should be successively lower, with some distance between them. If a reaction high equals or is greater than the previous reaction high, the descending triangle is not valid.  

In the case of SHIB price history, the length of the pattern will be measured in hours, but generally, descending triangles can last a few weeks or some cases, months.

During the pattern development, the volume should contract and spike upon the resolution of the pattern.

The measured move target of the pattern is calculated by measuring the widest distance of the pattern and subtracting it from the horizontal trend line.

With that framework, it is clear that SHIB price has defined a descending triangle pattern with two reactions on each trend line that have alternated and a gradual decline in volume.

The measured move target of the SHIB price pattern is $0.00000966, or a 36% decline from the horizontal trend line at $0.00001510. More importantly to current bullish investors, it equates to a 50% decline from the current price, $0.00001875.

SHIB price could still test the descending trend line at $0.00002212 before falling into the decline. It is crucial to ensure that the reaction high is below the previous reaction high at $0.00002298.

SHIB/USD 1-hour chart

SHIB/USD 1-hour chart

While Shiba Inu appears to be headed lower, investors must recognize that things can change quickly with newly minted cryptocurrencies. A SHIB price surge above $0.00002298 will void the bearish outlook afforded by the descending triangle pattern and raise the probability that Shiba Inu rushes towards the 38.2% and 50% Fibonacci retracement levels of the May 10 to May 12 decline at $0.00002401 and $0.00002690, respectively.

It is important for investors that want to traffic in a new cryptocurrency like Shiba Inu to take risk management very seriously because there is limited price history to generate technical indicator readings that can validate pattern construction and outcomes.

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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