Despite the recent falling wedge breakout, buyers of Shiba Inu (SHIB) have failed to reverse the bearish narrative due to the coin’s high correlation with Bitcoin.
A month-long trendline resistance (yellow dashed line) has dampened the potential for a buying rally since the bounce from the 61.8% Fibonacci level.
While the current setup shows a bearish edge, a close above or below trendline resistance could affect the future movement of the dog-themed coin.
At press time, SHIB was trading at $0.01075, up 1.95% from the previous day. (For brevity, the SHIB price is multiplied by 1000 from here).
SHIB daily chart
Source: TradingView, SHIB/USD
SHIB has been hovering between $0.02 and $0.032 for more than four months as bears continue to add pressure around the 38.2% Fibonacci level. But a symmetrical triangle setup on the daily chart favors sellers due to the alt’s previous downtrend.
After losing its $0.02 baseline, SHIB lost more than 60% of its value (from May 5th) and fell to a seven-month low on May 12th.
As a result, the distance between the south-looking 20 EMA (red) and 50 EMA (cyan) surged to new all-time highs. Previously, SHIB saw such a gap in its new high bull run last October.
In addition, SHIB’s trading volume dropped significantly while hindering its high volatility phase. Now, the upper and lower Bollinger Bands (BB) may further encourage relatively tight phases in the future.
A bullish inability to break above the month-long trendline resistance could prolong the current sluggish behavior on the charts. To pave the way to the $0.013 level, SHIB needs to break free from its immediate resistance.
Fundamental
Source: TradingView, SHIB/USD
The RSI has been hovering around oversold territory for the past three weeks after failing to sustain above the 33 resistance. Unless the bulls overthrow the 33 resistance, there is little chance of a strong SHIB recovery.
If CMF bounces off the -0.06 area, its recent rise will confirm a bearish divergence from prices.
in conclusion
SHIB is likely to continue its sluggish phase around $0.01045 as the sell volume outweighs the buy orders and the near-term EMA to the south.
Any close below this level would send alt further down to the lower bound of BB.
Additionally, alt has a staggering 98% 30-day correlation with Bitcoin. Therefore, keeping a close eye on the movements of Bitcoin and the overall market sentiment is crucial to making profitable moves.
Source of information: Compiled from AMBCRYPTO by 0x Information.The copyright belongs to the author and may not be reproduced without permission