Shiba Inu Breaks Out After Double Bottom – SHIB Price Could Climb Another 100%
What's Next For Shiba Inu After Double Bottom | Credit: Derek Fenech
Key Takeaways
- Shiba Inu (SHIB) has broken out from its descending wedge.
- The price of SHIB trades nearly 40% above its yearly open of $0.0000106.
- How long will Shiba Inu’s upward movement continue?
After an impressive start to 2024, Shiba Inu’s 300% surge to a new yearly high in March has given way to a sobering correction, with the price retreating to its lowest ebb.
However, in a surprising development, on Aug. 16, K9 Finance announced that liquid staking would arrive on Shibarium’s Layer-2 on Sept. 8. Shortly afterward, the price broke out from its corrective pattern.
With the narrative around Shiba Inu poised to shift again, let’s dive into the price action to decipher the coin’s likely trajectory for the remainder of the year.
Shiba Inu Breaks Out After Double Bottom
The price of SHIB has fallen since its yearly high of $0.000045 on March 5. At first, the decline was swift and did not follow any pattern.
On April 13, the decrease became more gradual, creating a descending wedge, considered a bullish pattern.
The two most recent touches of the support trend line created long lower wicks (white), considered signs of buying pressure. After the second one, the price began an upward movement and broke out.
The touches were also combined with bullish divergences (green) in the RSI and MACD, both signs of a bullish trend.
Finally, the downward movement shows a completed five-wave decrease, likely part of a diagonal pattern.
As a result, all signs point to the correction being over. If so, an upward movement has now started, which could be an A-B-C corrective structure or a new five-wave increase.
In both cases, a climb to the 0.5 Fibonacci retracement resistance level at $0.000028 is likely, which would amount to an increase of 100%.
Shiba Inu Bounces, Creates Double Bottom
Following its yearly high of $0.0000456 in March, SHIB’s price has been on a downward trajectory, shedding a staggering 77%.
Although the decline was marked by a series of choppy and gradual movements, the overall magnitude of the drop was substantial.
However, in a notable display of resilience, Shiba Inu staged a remarkable bounce from the Aug. 5 low, forming a long lower wick on the chart.
The interesting attribute of this bounce is that it confirmed three different support levels:
- A descending parallel channel’s support trend line (black)
- A 421-day ascending support trend line (white)
- The $0.0000112 horizontal resistance area.
The strong reaction at the recent low suggests that the market may have finally found a temporary bottom, at least for the time being.
On top of this, the July and August Shiba Inu lows resemble a double bottom pattern, even though the second bottom is lower than the first one. Bullish divergences in the RSI and MACD (green) strengthen this pattern and increase the likelihood of a breakout.
The channel’s resistance trend line is at $0.0000207, while the next resistance is at $0.0000280.
Bounce Incoming but Long-Term Trend Bearish
Despite the positive price action and indicator readings, the wave count gives a long-term bearish sentiment.
The most likely count shows that the SHIB price has completed an A-B-C structure starting in June 2023. The yearly high of March 2024 marked the top of this structure, which is identified by the triangle formation in wave B.
If this is true, the ongoing SHIB decline is a five-wave leading diagonal (black), part of a longer-term wave A.
Since a short-term bottom is in place, the price of SHIB could begin wave 2 soon, which will take it to the 0.5-0.618 Fibonacci retracement resistance level of $0.0000283-$0.0000325. This will likely cause a breakout from the short-term wedge and long-term channel.
Then, another downward movement is likely, completing wave C.
