Is the SHIB Correction Over? | Credit: Hameem Sarwar
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Key Takeaways
Shiba Inu (SHIB) has reached a 176-day support trend line.
Technical indicators have generated bullish divergences.
Can SHIB build on the divergences and prevent a breakdown?
Similarly to the rest of the crypto market, Shiba Inu has fallen since its December 2024 high. Following its peak, the memecoin corrected by 50%.
On Jan. 27, the SHIB price reached a long-term ascending support trend line that has historically catalyzed bullish trend reversals. A breakdown below it could spell trouble, leading to another 50% decline.
As SHIB hovers above this support, traders wonder: Can SHIB prevent a breakdown with a bounce, or is it doomed to lower prices?
The daily time frame SHIB chart shows that the price has followed an ascending support trend line for 176 days. After bouncing in September 2024, the price moved away from the trend line, reaching a high of $0.0000334 on Dec. 8.
However, SHIB has fallen since, declining nearly 50% and culminating with a low of $0.0000172 on Jan. 27, 2025. The decrease returned the price to the ascending support trend line, where SHIB trades today.
Since the trend line has existed for a long time, whether SHIB breaks down below it or bounces can determine the future trend’s direction.
Technical indicators are showing signs of a potential upcoming rally. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) have both generated bullish divergences, which often price upward movements.
If a bounce happens, the closest resistance area will be $0.0000245. On the other hand, a breakdown could take SHIB back to its closest support at $0.0000130.
Just a Relief Rally?
The wave count suggests the SHIB price will bounce, confirming the readings from the daily time frame. Unfortunately, the count suggests that the bounce will just be a relief rally that is eventually followed by new lows.
According to the count, SHIB is in wave C of an A-B-C corrective structure (white) that started with the 2024 high in March. Wave A developed into a leading diagonal, while wave B ended at exactly the 0.618 Fibonacci retracement resistance of $0.0000322 (black circle).
If the count is accurate, wave C will end below the August lows near the $0.0000070 horizontal support area.
The short-term count shows another leading diagonal for the first portion of wave C. Since the diagonal is complete, SHIB might have started a bounce, taking an A-B-C structure.
As a result, the count predicts a corrective bounce before the SHIB price falls to new lows.
While the bounce will likely be successful because of the bullish divergences in the RSI and MACD, the wave count suggests it will be corrective. As a result, SHIB could decline to new lows after the bounce is over.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Valdrin Tahiri is a cryptocurrency analyst and reporter at CCN, specializing in technical analysis with a focus on Elliott Wave theory, on-chain metrics, and fundamental research. He brings over seven years of experience in the crypto space as both a trader and writer.
He discovered cryptocurrencies in 2017 while earning his MSc in Financial Markets at the Barcelona School of Economics, which sparked a deep interest in blockchain and market dynamics. Since then, he’s contributed to top crypto outlets like BeInCrypto and CoinGape.
Valdrin also served as Community Manager of BeInCrypto’s Telegram group for three years, helping grow it into one of the largest crypto communities worldwide. His expertise in market structure and price patterns allows him to break down complex trends into clear, actionable insights.
He’s published thousands of articles covering altcoins, Bitcoin cycles, and macro trends.
