Shiba Inu must hold key support to avoid total capitulation
- Shiba Inu price on a knife’s edge as it approaches its final support zone.
- Flash-crash is likely if buyers are unable to support Shiba Inu.
- Upside potential, however, does exist and could initiate a massive short-squeeze.
Shiba Inu price found itself a victim of the selling pressure faced across all financial markets on Wednesday. Shiba Inu has found some technical support at the 50% Fibonacci retracement at $0.000049, but buying appears to be drying up. As a result, Shiba Inu is very much at risk of a capitulation move towards $0.0000100.
Shiba Inu price at risk of a -80% drop, but bulls could surprise any late short-sellers
Shiba Inu price action is developing one of the most sought-after bearish Point and Figure patterns: the Bearish Catapult. The bearish Catapult forms after a breakout below a triple-bottom, followed by a slight bounce by buyers, and then a breakout below a double-bottom. There is a theoretical short idea with a sell stop order at $0.0000400, a stop loss at $0.0000550, and a profit target at $0.0000100. Ultimately, Shiba Inu bulls must hold that $0.0000400 value area, or Shiba Inu could face a very violent flash crash. However, in the event of a breakout below the double-bottom, downside risk may be limited to the $0.0000150 value area.
$0.000005/3-box Reversal Point and Figure Chart
The short setup will be invalidated if Shiba Inu price moves above $0.000057.
On the long side of the market, there is an aggressive buying opportunity based on a Pole Pattern setup. The hypothetical long entry would be a buy stop order at the 100% Fibonacci expansion at $0.0000550, a stop loss at $0.0000475 and a profit target at $0.0000900. The entry is aggressive because it is based on a three-box reversal near a retest of the prior descending triangle pattern and is at risk of being rejected quickly. However, if buyers can sustain Shiba Inu price above the descending triangle, that will likely trigger a short squeeze and bring in a large number of FOMO buyers.
$0.000025/3-box Reversal Point and Figure Chart
The hypothetical long trade idea is invalidated if Shiba Inu price continues to drop below the $0.000040 level.
Author
Jonathan Morgan
Independent Analyst
Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.
