Shiba Inu (SHIB) has been trading inside a symmetrical triangle since May 13. Short-term readings indicate that a breakout is expected.
SHIB has been falling since reaching an all-time high price of $0.000088 on Oct 28. At the beginning of Jan, the price bounced at the $0.000021 support area and created a higher low, eventually leading to the creation of an ascending support line.
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However, on April 30 (red icon), it broke down from both the ascending support line and the $0.000021 horizontal support area. In turn, this led to a low of $0.000009 on May 12.
If the downward movement continues, the next closest support area would be at $0.0000075, created by the Aug to Oct 2021 lows.
Between May 9 and 12, the daily RSI generated a semblance of a bullish divergence (green line). The divergence occurred in oversold territory, increasing the chances of a potential bounce.
But the RSI is also still following a descending resistance line that has been in place since March 28. In order for the bullish divergence to be confirmed, the RSI has to initially break out from the line.
SHIB enthusiast @army_shiba tweeted a chart, stating that the price has increased by 4.25% today.
The two-hour chart shows that the price has been trading inside a symmetrical triangle since May 13. The triangle is considered a neutral pattern but usually leads to breakouts if it occurs after an upward movement.
More importantly, the bullish divergence trend is still intact (green line). This indicates that a breakout from the triangle is likely.
A breakout that travels the entire height of the pattern would take SHIB to the 0.618 Fib retracement resistance level at $0.00001455.
SHIB wave count analysis
Due to the presence of the triangle, it is likely that SHIB is in the B wave of an A-B-C structure (red).
Giving waves A:C a 1:0.618 ratio would lead to a high of $0.000015, which is very close to the triangle projection.
If the movement extends, giving waves A:C a 1:1 ratio would lead to a high of $0.000017.
For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here
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