Last week, the Shiba Inu (SHIB) broke out of a bullish pennant formation on the daily chart, indicating the potential for a significant price increase. Currently, SHIB price is going through a critical phase as it undergoes a retest of the breakout level. If successful, this retest could lead to significant gains.
The price of a Shiba Inu could double if this happens
A bullish flag is a continuation pattern that usually indicates a strong uptrend after a period of consolidation. On the daily chart, SHIB/USD is displaying a classic bullish flag formation. This pattern consists of two converging trend lines that form a small symmetrical triangle, after a significant price rise. The pennant plume represents the initial sharp rise from late February to early March, while the pennant itself formed from March through May.
The upper trend line of the pennant served as resistance several times, while the lower trend line provided support just as often. The breakout above the upper trend line occurred on Wednesday of last week, and SHIB is currently going through a retest phase. This retesting is critical to confirm the authenticity of the hack. A successful retest, where the price finds support at the upper border of the flag, can indicate a strong continuation of the previous uptrend.
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The key price level to watch is currently around $0.00002350. Other important price levels to watch include resistance levels at $0.00002482, which coincides with the 0.236 Fibonacci retracement level, and the next resistance levels at $0.00002881, $0.00003204, $0.00003527, and $0.00003987. These levels represent the 0.382, 0.5, 0.618, and 0.786 Fibonacci retracement levels, respectively, and are crucial targets if the uptrend continues.
On the support side, the immediate level to watch is $0.00002220, which is in line with the low of the recent pennant. Further support can be found at the 200-day moving average, currently at $0.00001854, and the 0 Fibonacci retracement level at $0.00001836, marking the lowest point of the recent consolidation phase.
Moreover, the 20-day moving average at $0.00002399 and the 50-day moving average at $0.00002418 are crucial for SHIB as they offer the next resistance levels. SHIB is currently trading slightly above the 20-day EMA but below the 50-day EMA, indicating mixed short-term momentum.
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The Relative Strength Index (RSI) stands at 48.74, near the neutral 50 mark, indicating that SHIB is neither overbought nor oversold. This neutral position provides room for potential upward movement without being hindered by overbought conditions.
Volume analysis shows a gradual decrease during the formation of the pennant, which is characteristic of this pattern. A significant increase in volume upon a successful retest will be a strong confirmation of the bullish flag. The recent breakout and current retest phase are crucial to monitor. A successful retest with increased trading volume will likely validate the bull flag pattern and signal a continuation of the uptrend.
Potential price targets for SHIB can be estimated based on the bull flag, assuming a successful breakout and continuation of the bull flag pattern, based on the initial flagpole height. The flagpole, which represents the initial sharp rise from about $0.00001 to $0.000036, gives a rally of about $0.000026. Adding this to the breakout point at $0.00002436, the price target for SHIB is around $0.00005036.
Featured image created with DALL·E, chart from TradingView.com
