© Reuters. Shiba Inu Follows Dogecoin, Bitcoin Into This Pattern: What To Watch
(CRYPTO: SHIB) was sliding over Thursday in tandem with (CRYPTO: DOGE) and (CRYPTO: BTC).
A number of cryptocurrencies, including Dogecoin and Bitcoin, have settled into bear flag patterns on their daily charts and Shiba Inu is no exception.
The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock higher between a channel with parallel lines or into a tightening triangle pattern.
- For bullish traders, the “trend is your friend” (until it’s not) and the stock may continue to rise upward within the following channel for a short period of time. Aggressive traders may decide to purchase the stock at the lower trendline and exit the trade at the higher trendline.
- Bearish traders will want to watch for a break down from the lower descending trendline of the flag formation, on high volume, for an entry. When a stock breaks down from a bear flag pattern, the measured move lower is equal to the length of the pole and should be added to the highest price within the flag.
A bear flag is negated when a stock closes a trading day above the upper trendline of the flag pattern or if the flag rises more than 50% up the length of the pole.
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The Shiba Inu Chart: Shiba Inu’s bear flag pattern began on June 10, with the pole formed between that date and June 13 and the flag forming over the 24-hour trading periods that have followed. The measured move, if the pattern is recognized, is about 30%, which suggests the crypto could plummet toward the $0.00000625 mark.
- Shiba Inu is trading in a downtrend, with the most recent lower high printed on June 8 at $0.00001091 and the most recent confirmed lower low formed at the $0.0000074 mark on June 13. If Shiba Inu breaks down from the bear flag pattern, it will also print another lower low.
- The crypto is likely to bounce up over the next few days even if it does break down from the bear flag, as Shiba Inu’s relative strength index (RSI) is measuring in at 30%. When a stock or crypto’s RSI reaches or falls below that level it becomes oversold, which can be a buy signal for technical traders who are anticipating a bounce.
- Shiba Inu is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The crypto is also trading well below the 50-day and 200-day simple moving averages, which is bearish.
- There is resistance above at $$0.00001349 and $0.00001734 and support below at $$0.00000690 and $0.00000600.
See Also: How to Read Candlestick Charts for Beginners
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