Shiba Inu (SHIB) Price Poised for 130% Gain – Double Bottom Pattern Explained
What Does Shiba Inu's Double Bottom Mean | Credit: Derek Fenech
Key Takeaways
- Shiba Inu (SHIB) broke out from a descending wedge
- It created a bullish double-bottom pattern before breaking out.
- How long can the SHIB price increase after the breakout?
The SHIB price has corrected for the past six months but seemingly reached a temporary bottom on Aug. 5. Shortly afterward; it broke out from a descending wedge pattern.
Even though the price still trades close to its breakout level, positive signs suggest that this upward movement will continue.
Will this be the case, and if so, how long will the SHIB price continue to increase?
SHIB Double Bottom Leads to Breakout
The daily SHIB chart shows that the price has fallen over 70% since its yearly high of $0.000045 in March. The downward movement culminated with a low of $0.000010 on Aug. 5, and the price has increased since.
The movement since April was contained inside a descending wedge, considered a bullish pattern. Also, touches of the pattern’s support trend line (white icons) created long lower wicks, signs of buying pressure.
On Aug. 19, SHIB broke out from the wedge, signifying it had started its trend reversal. While it has returned to its pre-breakout levels, SHIB created a short-term double bottom, considered a bullish pattern.
The breakout was preceded by a bullish divergence in the daily RSI and MACD (green), further increasing its legitimacy. Despite the breakout, the RSI is below 50, and the MACD is still negative.
If the upward movement continues, the closest resistance area will be at $0.000028-$0.000032, created by the 0.5-0.618 Fibonacci retracement resistance levels.
SHIB Price Prediction: Reversal or Relief Rally?
The wave count suggests that the upward movement will simply be a relief rally. The count shows that the decrease inside the wedge was part of a five-wave downward movement (black).
If true, the movement is likely a leading diagonal part of a larger wave A (white). The shape of the wedge also aligns with the leading diagonal scenario.
In this possibility, the price of SHIB will complete wave B near the 0.5-0.618 Fibonacci retracement resistance levels at $0.000028-$0.000032. An upward movement to the middle of this range would amount to an increase of 130%.
Conversely, falling below the Aug. 5 low of $0.000010 will invalidate this count and likely lead to lower prices.
The SHIB price action and wave count validated the ongoing breakout from the descending wedge, implying it will likely lead to higher prices. However, they also suggest this will not be the beginning of a new upward trend but rather a relief rally that is eventually followed by new lows.
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