Since reaching this year’s high of $0.00004749 a month ago on March 5, the price of Shiba Inu (SHIB) has fallen about 40%. Nonetheless, there may be brighter days ahead. Following a 390% surge in just 8 days from late February to early March, a sideways movement in SHIB prices was inevitable. But this phase may soon come to an end.
Shiba Inu price surges 65%?
On the daily chart, Memecoin is showing significant chart patterns that suggest a significant price move is imminent. Analysis of the daily SHIB/USD chart reveals a symmetrical triangle pattern. This classic chart pattern is generally considered a continuation pattern and usually heralds a rise in volatility. Given that SHIB is showing a noticeably strong uptrend, momentum could bounce back in favor of the bulls.
Over the past five weeks, the price of SHIB has been making a series of lower highs and higher lows, which is evident from the converging trend lines encompassing the price movement. The peak of the triangle is rapidly approaching, suggesting a breakout is imminent. This type of consolidation suggests market indecision and we can expect significant movement in either direction as the pattern reaches its conclusion.
The current price at the time of analysis is $0.00002842. This is particularly common during the formation of symmetrical triangles, and the volume decreased as the pattern developed further validating the pattern.
The exponential moving average (EMA) also paints an important picture. The 20-day EMA is flat, indicating a neutral short-term trend, while the 50-day, 100-day, and 200-day EMA are all trending upward, providing strong support levels. Notably, the price is currently above the 20-day EMA, located around $0.00002817, and this level could act as strong support in the near term.
The Relative Strength Index (RSI) is hovering around 52.40, slightly above the 50 midpoint that separates bullish and bearish momentum. RSI levels represent a neutral stance on market momentum, but there is still room for upside if market sentiment moves positively.
In terms of deriving price targets from this pattern, technical analysts typically measure the height of the triangle at its widest point and estimate the distance from the breakout point.
If SHIB breaks above the triangle, the price could surge to target the height of the triangle, which could be in the area of yearly highs around $0.000048 considering the widest part of the pattern. This translates to a 65% price increase from current prices. Conversely, a downside breakout could test the price towards the $0.00001500 level, which would be the same target on the downside.
A symmetrical triangle can lead to a significant breakout, but it is important to mention that direction is not certain until a clear breakout occurs with increasing volume. Traders and investors should watch the daily closing price outside the triangle boundary with increasing volume to determine the direction of the breakout.
Featured image created with DALL·E, TradingView.com chart
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