Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
The dog-themed token made a steep decline after hitting its ATH in October last year. For example, Shiba Inu (SHIB) fell southwards between parallel channels and fell below the vital liquidity range near the $0.033 zone. (SHIB prices: multiplied by 1000 from now on)
Assuming the 20 EMA (blue) was solid, any close below the 200 EMA (yellow) would brace SHIB for a retest of its five-month trendline support (white, dashed) or the demand zone created near the range of $0.022-$0.02 (rectangle). As of going to press, SHIB was trading at $0.02538, down 15.9% from the past week.
SHIB Daily Chart
During this bearish phase, SHIB lost its crucial Point of Control (red, horizontal) near the $0.033 level and dropped below its 200 EMA (yellow). In addition, this level coincided with the Fibonacci resistance of 23.6%. The decline stopped at the $0.02 that buyers held out for more than four months.
As a result, the price entered a tight phase as the bulls started to build pressure and rejected lower prices. Thus, it saw more than 70% gains from February 3-9 and broke out of the down channel while the 23.6% level remained strong. In recent days, pullback volumes have outpaced recovery volumes, indicating strong bear movement.
Going forward, SHIB wanted to test its five-month trendline support before a likely test of its demand zone would cause it to bottom at the $0.02 level. Post which, the bullish comebacks, would continue to find a ceiling at the checkpoint.
The RSI matched the price and swung below the midline, revealing a bearish edge. Any close below the 43 support would open the gates to a demand zone retest.
Interestingly, the Squeeze Momentum indicator has been in a high volatility phase for the past month. Any black dot on the daily chart would indicate a tight/low volatility phase in the coming days.
Taking into account the recent rejection of higher prices, a retest between $0.022 and $0.02 would be likely before picking itself up to challenge its liquidity zone. Any drop below the demand zone would bring sell signals.
By the way, the alt shared an 89% 30-day correlation with Bitcoin. Therefore, it would be essential to keep an eye on Bitcoin’s movement with general market sentiment in order to make a profitable move.
This post The where and how of SHIB traders making a profit here
was published first on https://ambcrypto.com/the-where-and-how-of-shib-traders-making-a-profit-here/