March 24, 2023

Disclaimer: The results of the analysis below are the author’s sole opinion and should not be considered investment advice

After more than three months, Shiba Inu [SHIB] A bullish volatility breakout above the $0.0126 level was spotted. (For brevity, the SHIB price is multiplied by 1000 from here).

However, as SHIB broke below its four-hour 20/50/200 EMA, the $0.017 ceiling put the meme coin back on a bearish trajectory. Now, SHIB is on thin ice as price action approaches its support area.

If buyers defend the support at $0.01227, a rebound in SHIB is likely. At press time, SHIB was trading at $0.01233, down 7.42% over the past 24 hours.

SHIB 4-hour chart

Source: TradingView, SHIB/USD

Over the past two weeks, SHIB’s decline needed support from a southward trendline (white, dashed). A bullish engulfing candlestick on August 25 reversed this trendline resistance into immediate support.

But the southbound 20 EMA (red) and 50 EMA (cyan) avoided a bullish crossover and resonated with selling. Additionally, price action settled below the 200 EMA (green), reinforcing the bearish momentum.

So, below $0.01227 level A continuation of the current bearish move is likely.In this case, the potential target would be at $0.0117-$0.0112 range.

An immediate close above $0.01227 would confirm reverse Chance.In this case, SHIB could witness a recovery from its EMA $0.0129-0.0133 range. The inability to find a close above the two-week trendline support will encourage a bearish move in the coming days.


Source: TradingView, SHIB/USD

The Relative Strength Index (RSI) is gradually moving south with an eye toward testing the oversold territory. Buyers should look for a potential rally in the area before calling options.

Nonetheless, the Volume Oscillator marked lower peaks and troughs in the current downtrend. The reading hinted at a relatively weak bearish move.

The Directional Movement Index (DMI) lines are showing a bearish crossover. But the Average Directional Movement Index (ADX) continues to paint a rather weak directional trend.

in conclusion

Given the confluence of the $0.01227 baseline with two-week trendline support, SHIB buyers will be aiming for a comeback. But the EMA’s southward bias may limit buying pressure to maintain a long-term bearish advantage on this time frame. The goals will remain the same as discussed.

Additionally, alt has a 30-day correlation with Bitcoin of 14%. Therefore, following Bitcoin’s movement through overall market sentiment may help identify any bullish invalidation.

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