Shiba Inu’s December Journey: Can It End on a High Note?
Shiba Inu (SHIB) had a rough ride when it encountered resistance on December 17, causing its price to plummet. However, it has since managed to regain its footing and is now trading above a crucial horizontal level. The big question now is whether it can summon the strength for a final push to close out the year on a positive note.
Shiba Inu Holds Its Ground Above Resistance
SHIB’s price has been on an upward trajectory since hitting a low of $0.0000054 back in June. In October, it established a higher low (marked by a green icon) and then picked up its pace of ascent. Last week, SHIB reached a high of $0.0000119, surpassing a long-standing horizontal resistance zone. However, it couldn’t sustain this upward momentum, resulting in a long upper wick (indicated by a red icon). This setback brought SHIB back to the horizontal zone, which has alternated between serving as support and resistance since May 2022.
Assessing Market Conditions with RSI
When evaluating market conditions, traders often turn to the Relative Strength Index (RSI) as a momentum indicator to determine if an asset is overbought or oversold and whether it’s time to buy or sell. If the RSI reading is above 50 and the trend is upward, it signals an advantage for the bulls. Conversely, if the reading falls below 50, the opposite holds true. Currently, the weekly RSI is above 50 and on the rise, both indicative of a bullish trend.
SHIB Price Prediction: Breakout or Rejection?
While the weekly chart suggests a bullish leaning, the daily chart tells a different story, hinting at a potential initial decline before a resumption of the upward trend. This is based on the price action and RSI analysis. The price action reveals that SHIB has been trading within an ascending parallel channel since June, which often contains corrective movements. On December 17, SHIB encountered the channel’s resistance trend line (as denoted by the red icon) and was met with rejection, resulting in a bearish candlestick. This rejection coincided with a bearish divergence in the RSI (highlighted in green), a sign that typically precedes bearish reversals. If SHIB continues to decline, it could drop by an additional 12% and reach the nearest support level at $0.0000095.
However, despite this short-term bearish outlook, a breakout from the channel would indicate that the correction is over and could potentially lead to a 40% surge towards the next resistance level at $0.0000150.
For BeInCrypto’s latest crypto market analysis, click here.
