SHIBA INU (SHIB) has been entrenched in a prolonged downtrend, forming a descending wedge pattern on the charts. Recent price action, however, hints at a potential bottoming structure, suggesting a possible breakout if critical resistance levels are breached.
SHIB Price Analysis
On the 4-hour chart, SHIB has been trading within a well-defined descending wedge pattern since its peak at $0.00003342 on December 8. This pattern is characterized by a series of lower highs and lower lows, indicating a corrective phase. The structure aligns with an ABCDE wave sequence, with Wave Y potentially concluding near the recent low of $0.000011.
The 0.786 Fibonacci retracement level at $0.00001504 has emerged as a strong support zone, with SHIB attempting to rebound from this area. The broader Elliott Wave analysis suggests that SHIB has been undergoing a complex WXY correction since its local high on March 5 at $0.000045.
- Wave W marked a significant decline, followed by a corrective Wave X, which failed to break above the descending resistance.
- The subsequent Wave Y has been gradually moving lower, forming a series of corrective subwaves, and appears to be nearing completion near critical support levels.
The Relative Strength Index (RSI) on the 4-hour chart is deeply oversold, a condition that has historically coincided with reversal points. Additionally, the interaction with the 0.786 Fibonacci level supports the possibility of a bounce. However, confirmation of a reversal would require a sustained breakout above the descending wedge resistance, ideally accompanied by strong trading volume.
SHIB Price Prediction
The 1-hour chart provides a closer look at the potential breakout scenario. SHIB seems to have completed Wave E of the larger correction, forming a local double-bottom pattern near the $0.00001172 level. This structure could serve as a springboard for a price recovery if validated.
A breakout from the descending wedge could propel SHIB toward its first major resistance at $0.00001504, which aligns with the 0.786 Fibonacci retracement level. Beyond this, the 0.618 Fibonacci level at $0.00002147 presents a critical hurdle, as it has previously acted as a zone for lower highs.
If bullish momentum continues, SHIB could rally toward the 0.5 Fibonacci level at $0.00002599, where significant selling pressure is expected. A more extended upward move might target the 0.236 Fibonacci level at $0.00003609, completing a full corrective retracement.
However, failure to break above the descending wedge resistance would indicate continued downside risk. A drop below the $0.0000100 zone would invalidate the bullish reversal scenario, potentially leading to a retest of lower support levels.
Key Levels to Watch
- Immediate Resistance: $0.00001504 (0.786 Fibonacci retracement).
- Key Resistance: $0.00002147 (0.618 Fibonacci retracement).
- Critical Resistance: $0.00002599 (0.5 Fibonacci retracement).
- Short-Term Target: Above $0.00003609 if bullish momentum sustains.
- Invalidation Zone: Below $0.0000100, signaling further downside potential.
In summary, while SHIB shows signs of a potential reversal, traders should remain cautious and wait for confirmation of a breakout above key resistance levels. A failure to breach these levels could see the downtrend persist, with the price testing lower support zones.