Shiba Inu (SHIB) Price Risks 20% Decline if This Structure Fails to Hold

Key Takeaways

• Shiba Inu (SHIB) trades inside long- and short-term channels.
• The wave count gives a bearish outlook for the future trend.
• Can Shiba Inu bounce, or is another decline inevitable?

While the Shiba Inu price increased quickly between Sept. 17-28, it has struggled since, falling and creating a lower high.

Additionally, the ongoing bounce does not lend much confidence since it is contained inside a corrective movement.

Can Shiba Inu move outside of this pattern and reach new highs, or is more downside likely in the short term? Let’s find out.

SHIB Creates Lower-High

The daily time frame Shiba Inu chart shows that the price has increased inside an ascending parallel channel since August. The upward movement caused both the support and resistance trend lines to be validated numerous times.

More recently, the resistance trend line rejected SHIB on Sept. 27 (black icon), triggering a decline.

While the SHIB price bounced at the channel’s midline, it created a lower high on Oct. 19, validating the $0.0000195 area as resistance.

SHIB has fallen since.

Technical indicators are also turning bearish. The Relative Strength Index (RSI) risks falling below 50, while the Moving Average Convergence/Divergence (MACD) has made a bearish cross.

If the downward movement continues, SHIB can reach the channel’s support trend line at $0.0000145, a 20% decline from the current price.

SHIB Price Breakdown Ahead?

The short-term six-hour price action and wave count support the bearish SHIB prediction. The price action shows that the short-term bounce started on Oct. 1 is inside an ascending parallel channel. Currently, the SHIB price risks a breakdown from the channel.

The wave count implies the bounce is part of wave B in an A-B-C corrective structure (white). If so, SHIB has just started wave C.

Giving waves A:C a 1:1 ratio leads to a low of $0.0000144, close to the previously outlined support trend line. Afterward, the SHIB price could begin to increase once more.

Downside Before Reversal

The daily and six-hour SHIB price charts both suggest that a downward movement is likely.

Once the Shiba Inu price breaks down from its short-term channel, it can decline 20% to its closest support before possibly reversing.