Shiba Inu (SHIB) Price Eyes 75% Surge if Key Resistance Is Broken

Key Takeaways

• Shiba Inu (SHIB) has been recovering since Aug. 5.
• The price broke out from a descending wedge.
• Can the SHIB price preserve its momentum?

The Shiba Inu (SHIB) price has increased since Aug. 5, creating a higher low in September. Despite creating a bullish pattern, SHIB trades below its main resistance area.

Let’s analyze SHIB’s price action, determine the likelihood of a breakout, and explore where the price might head if it does.

Shiba Inu Price Breaks Out

The daily chart shows that SHIB has decreased inside a descending wedge since April 15. After bouncing inside its support and resistance trend lines, SHIB finally broke out on Aug. 19.

A bullish divergence in the Relative Strength Index (RSI) and MACD (green) preceded the increase. Interestingly, SHIB created a double-bottom pattern after breaking out, combined with another bullish divergence (yellow).

The double bottom is a bullish pattern, and due to the bullish divergence, it is more likely to trigger an upward movement.

The SHIB price is approaching the next resistance at $0.0000157. If it breaks out, the price will confirm the bullish pattern and can trigger an upward movement toward the next horizontal resistance at $0.000028.

Read More: Shiba Inu Price Prediction 2024 | SHIB Price Analysis

While there is no immediate news regarding Shiba Inu, the Shibarium ecosystem has been thriving  since the launch of K9 Finance, showing a considerable increase in liquid staking and transactions.

The Total Value Locked (TVL) in Shibarium  is $1.39 million, nearly 10% of which comes from the K9 Finance DAO.

Possible Relief Rally?

While the daily time frame price action and indicator readings are bullish, the wave count implies the ensuing increase could simply be a relief rally.

This is because it shows the meme coin has completed a five-wave structure to the downside, which took the shape of a descending wedge. It suggests the trend is bearish, and upward movements are relief rallies.

If the count is accurate, SHIB will soon begin wave B toward the 0.5-0.618 Fibonacci retracement resistance of $0.0000236-$0.0000277. This would be an increase of 75%.

After reaching the target, SHIB could begin another downward movement, completing wave C toward new lows.

Bullish End to September

The price action and wave count suggest that the SHIB price will soon begin an upward movement, though the latter implies that it will not last.

The SHIB price can increase 75% until it reaches the 0.5-0.618 Fibonacci retracement resistance area.

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About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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