Key Takeaways
Shiba Inu (SHIB) navigates a key support zone after experiencing a corrective decline.
The higher time frame chart suggests a potential completion of a corrective wave, while the lower time frame analysis highlights a possible breakout from the forming bullish pennant.
SHIB has significantly corrected from its previous high of $0.000033 on Dec 7, forming a classic Elliott Wave ABC structure.
After losing 48% of its value, the price has started consolidating above the 0.786 Fibonacci retracement level, around $0.00001745 on Jan 27. This suggests that the corrective wave (C) might be nearing completion.
The daily chart also shows a prior five-wave impulse to the upside, indicating that SHIB remains in a broader bullish trend.
The breakdown below the trendline was a bearish signal, but further decline was prevented.
The Relative Strength Index (RSI) hovers near oversold conditions, suggesting weakening bearish momentum. If SHIB holds above this level and forms a base, it could confirm a bottoming process.
A breakout above $0.00002211 (0.5 Fib level) would confirm a potential bullish reversal.
SHIB forms a symmetrical triangle on the hourly chart, often indicating impending volatility. The Elliott Wave count suggests that SHIB has completed wave (ii) of a potential five-wave impulsive move.
If this count is correct, the next significant move should be wave (iii), targeting the 0.5 Fib retracement at $0.00002211 as the next major resistance.
A clean breakout from the current consolidation would likely lead to a rapid move higher, with Fibonacci extensions indicating a price target of $0.00002470 (0.382 Fib level), followed by $0.00002790 (0.236 Fib level). These levels align with prior structural resistances.
However, a failure to break out could result in further downside. If SHIB loses support at $0.00001952 (0.618 Fib level), a retest of $0.00001584 (0.786 Fib level) may occur. This would invalidate the bullish scenario and confirm continued weakness.
The RSI on the 1H chart is neutral, meaning the next move will likely be dictated by volume and breakout confirmation.
If volume increases upon breaking resistance, it would confirm a wave (iii) extension towards higher targets.
SHIB is currently at a pivotal level, which could either confirm a reversal or continue its decline. The daily chart suggests that a corrective phase may be completed, while the lower time frame hints at a possible bullish wave structure forming.
A breakout above $0.00002211 would confirm a bullish scenario, whereas a drop below $0.00001952 would increase bearish risks.