The Shiba Inu (SHIB) price is trading inside an important support area that could initiate a bounce. Closing below would harm the bullish potential of the future price.
On Jan.13, the price of SHIB broke through a descending resistance line that had been in place since Aug. 2022. This led to a high of $0.0000157 on Feb. 4. The price also reclaimed an important resistance area at an average price of $0.0000120.
Following the breakout, the daily RSI produced a bearish divergence within overbought territory. Furthermore, the Shiba Inu token price formed a long upper wick. Afterward, a decrease followed, which accelerated on Feb. 9. Now, the SHIB token price is trading inside the $0.0000120 area once more, validating it as support. Since the area also coincides with the descending resistance line, it is a crucial level.
If SHIB price breaks down, it will put the entire upward movement in doubt. In that case, the next closest support area would be at $0.0000102.
SHIB/USDT Daily Chart. Source: TradingView
Shiba Inu Price Begins Correction
The technical analysis from the short-term six-hour time frame shows that the SHIB price completed a five-wave upward movement leading to the $0.0000157 high. The defining feature of this move is the triangle that was part of wave four. Moreover, wave five extended and had the length of waves one and three combined (black).
If the count is correct, the SHIB price is now mired in an A-B-C corrective structure, which could end at the 0.618 Fib retracement support level at $0.0000108. If so, it is currently in the B wave, which will begin in the next 24 hours. Therefore, after an initial bounce, another drop will follow in order to complete the correction.
After the correction is complete, the SHIB price could increase toward its Aug. 2022 highs at $0.0000175.
A decrease below the yearly lows at $0.0000077 would invalidate this bullish Shiba Inu price forecast. In that case, the SHIB price could fall toward $0.0000050.
SHIB/USDT Six-Hour Chart. Source: TradingView
To conclude, the Shiba Inu analysis suggests that the price is correcting after a month-long upward movement. The trend is still bullish. A decrease below $0.0000077 would invalidate this bullish forecast and could send the price of Shiba Inu toward $0.0000050.
For BeInCrypto’s latest crypto market analysis, click here.
BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.