Shiba Inu is trading below the confluence of a descending channel, with analysis suggesting further downward moves are likely.
Analyst Lingrid shared this in her TradingView commentary on Thursday, taking a bearish stance even as Shiba Inu makes a mild rebound effort. After an over 2% rise yesterday, the meme coin has continued with this momentum today, up over 1%.
Shiba Inu Below Confluence Trendline
Nonetheless, Lingrid shared that Shiba Inu trends below the critical trendline in a developing descending channel. A shared SHIB/USDT 4-hour Binance chart shows that the token’s price action has developed within this channel since mid-August, also forming other sub-patterns.
Most recently, a broader market capitulation saw Shiba Inu break down from an upward channel, dropping to $0.0000067 on October 10 before recovering. Despite the comeback, she noted that SHIB still trends below the confluence of the descending trendline.
This comes after a rebound to the $0.0000148 and $0.0000136 resistance band stalled. The selling pressure pushed the cryptocurrency below the confluence at $0.00001078, sending it into bearish territory.
Further Lows for SHIB and Invalidation Point
Meanwhile, the analyst noted that as long as SHIB trades below $0.0000110, it could continue its sideways move. She predicted a dump to the next support level at $0.00000865, representing a 15% correction from the current market price.
The drop target aligns with the lower support trendline of the descending channel. This puts SHIB under severe downward pressure, as a massive correction would ensue if it dropped below the trendline.
However, the analyst emphasizes that this move will not happen if the current bullish momentum takes the asset’s price to $0.00001136. She mentioned that a sustained break above the $0.00001108 to $0.00001136 range would flip the near-term structure.
The move could also force Shiba Inu towards $0.0000125 and $0.0000136, representing 22.5% and 33.3% increases, respectively. A broader market rebound, a meme coin frenzy, and a sharp Bitcoin rebound could also spur this move, invalidating the current bearish momentum.
Remarkably, analyst SwallowAcademy predicted a similar Shiba Inu move, targeting the 200-day exponential moving average (EMA). The indicator trended at $0.00001299 at the time of his analysis.
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