Sheldon McIntyre, CMT
FXStreet
- Shiba Inu price currently building the right shoulder of a multi-week inverse head-and-shoulders pattern.
- SHIB 200 four-hour SMA has flattened, reflecting a decline in downside momentum.
- Rookie cryptocurrency requires a 38% gain to trigger the new governing pattern.
Shiba Inu price did test the May 19 low again earlier this week but did rebound before testing the June 11 low, establishing the low point of a potential inverse head-and-shoulders pattern. The ongoing rebound has been tentative, suggesting a mild pullback before starting a rally towards the pattern’s neckline. With two four-hour moving averages haunting price, practicing patience and letting the SHIB right shoulder develop is advisable.
Shiba Inu price still lacks the volatility to formalize a march higher
Shiba Inu price collapsed over 40% from the June 15 high of $0.00000986 to the June 22 low of $0.00000560 after being overwhelmed by the selling that gripped the cryptocurrency complex. SHIB did manage to hold the June 11 low, establishing a point to build the right shoulder of the visible inverse head-and-shoulders pattern.
The measured move target of the pattern is $0.00001730, equating to an 82% gain from the neckline and nearly touching the 38.2% Fibonacci retracement level of the May crash at $0.00001754. To reach the neckline at $0.00000945, Shiba Inu price will need to rally close to 40%, overcoming the resistance established by the declining 50 four-hour SMA at $0.00000731 and the 200 four-hour SMA at $0.00000792. It is a long wait for impatient SHIB investors, but it will enhance the trade’s probability of success.
A breakout above the neckline by Shiba Inu price would meet resistance at $0.00001048 and then the merger of the May 24 high at $0.00001204 with the May 20 high at $0.00001214. There is no more meaningful resistance for SHIB until the measured move target of $0.00001730.
It is important to note that other cryptocurrencies formed inverse head-and-shoulders patterns, albeit with a larger footprint, before delivering significant investment returns to investors, such as XRP and ZIL.
SHIB/USD 4-hour chart
Today, the rebound from the right shoulder low appears corrective, wedging higher on very light volume, possibly indicating that Shiba Inu price weakness has not passed. SHIB may need to revisit the shoulder low at $0.00000560 before staging a purposeful rally towards the pattern’s neckline if that is the case.
A decline below the head’s low at $0.00000550 would void the price structure, exposing Shiba Inu price to notable losses. It is a potential outcome for SHIB should the cryptocurrency market suffer a new wave of selling.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Latest Crypto News & Analysis
Editors’ Picks
Crypto bulls unfazed by flash crash
Bitcoin price action initially shakes off strong selling pressure, finds buyers at support, then resumes some selling pressure. Ethereum price action mixed post-all-time high rejection. XRP price awaits its own bullish breakout and an opportunity to outperform its peers.
MATIC price ready for new all-time highs as $188 million flow into Polygon
The total number of transactions on Polygon network dropped nearly 15% due to a rise in transaction fees over the past week. This hasn’t negatively impacted the network as the number of unique daily active users remained stable.
AVAX price offers a bullish opportunity before Avalanche hits new all-time highs
Avalanche (AVAX) price has seen a bullish outbreak on Thursday after it broke out above – and then retested – the red descending trend line at $61.62. With even more buyers and bulls coming in, expect a run towards new all-time highs at $81.
XLM price building base for bullish breakout
Stellar bulls are in the last phase of completing a bullish triangle. As XLM price is getting squeezed against the base ($0.40), expect a quick breakout of 12%. After taking a breather, expect another 10% of profits to follow.
Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive
Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.