Shiba Inu (SHIB) Price Revisits Critical Support After 40% Drop

Key Takeaways

• Shiba Inu (SHIB) fell 40% after reaching its range high.
• The price has returned to a confluence of support levels.
• Will the SHIB price bounce or break down from this level?

The Shiba Inu price has dropped 40% since its $0.0000334 high on Dec. 8. The decrease took the price to the long-term horizontal support of $0.0000200.

The reaction to this level will be critical in determining if the long-term trend is bullish or bearish. Let’s analyze the price action and see which is more likely.

SHIB Lower High

The Shiba Inu price has declined since reaching a high of $0.0000345 in December (black icon), validating the $0.0000340 horizontal resistance area, which has been in place since 2022.

Shiba Inu moved above it during its yearly high of $0.0000456 in March (black circle) but failed to sustain the increase, creating a long upper wick. Relative to the yearly high, SHIB created a lower high in December.

Today, the Shiba Inu price reached the $0.0000218 horizontal support area after a 30% drop since its highs. This critical support area creates a horizontal range alongside the $0.0000345 one.

Technical indicators are also at a critical level. The Relative Strength Index (RSI) has reached 50 from above. If it breaks down, it will mean SHIB is in a bearish trend, especially if the price closes below the $0.0000218 horizontal support area.

However, the Moving Average Convergence/Divergence (MACD) is still bullish since it is above 50 and has not made a bearish cross.

Therefore, the weekly time frame is inconclusive in determining the future SHIB trend.

Will Shiba Inu Bottom?

Similarly to the weekly time frame, the daily chart gives mixed signals. The wave count suggests that SHIB has completed a five-wave upward movement (black) and an A-B-C correction.

In the context of the long-term movement, these are waves one and two in a long-term five-wave increase.

However, the SHIB price has to bounce at the current level for the wave count to remain valid.

SHIB is nearing a confluence of support levels, created by the 0.5 Fibonacci retracement support level, the $0.0000200 horizontal support area, and the middle of an ascending parallel channel.

Technical indicators show bearish signs. The RSI and MACD are decreasing and have fallen below their bullish thresholds at 50 and 0, respectively.

Therefore, the reaction at the current level will be key. If Shiba Inu bounces, it could begin an upward movement and increase toward the range high.

On the other hand, a decisive close below $0.0000200 could mean the price has started a bullish trend.

Uncertain Trend Ahead

The Shiba Inu price has decreased 40% since its December highs and has reached a long-term horizontal support area.

Whether the SHIB price bounces or breaks down will determine the direction of the future trend.