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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Following a breakdown from a previous triangle setup, Shiba Inu looks to claw back lost ground from yet another symmetrical triangle setup. A recovery along the RSI underpinned SHIB’s development within the triangle, although at press time, a bearish bias was still intact.
Traders should watch out for a close above key levels to get more clarity as far as breakout direction is concerned. At the time of writing, SHIB was trading at $0.00005279, up by 0.44% over the last 24 hours.
Shiba Inu 4-hour Chart
Source: SHIB/USD, TradingView
Shiba Inu formed yet another symmetrical triangle after snapping three lower highs and three higher lows over the last 10 days. Post the final round of consolidation, SHIB eyed a 33% breakout in either direction, based on the highest and lowest points within the pattern.
Bullish traders should await a close above the confluence of the 4-hour 50-SMA (yellow) and 138.2% Fibonacci Extension. This would pave the way for a breakout target of $0.00007209. A decisive leg above 11 November’s swing high of $0.00005796 would confirm a favorable outcome.
On the flip side, a breakdown can be anticipated if SHIB weakens below its 200-SMA (green). A move in the opposite direction could extend all the way to the defensive zone of $0.00003282-$0.00003180.
Reasoning
Considering the nature of its 4-hour RSI, MACD, and Awesome Oscillator, SHIB seemed to be within a bearish bias. Especially since each of the indicators traded under their half-lines and offered sell signals.
However, it’s worth noting that the RSI formed an ascending triangle and was awaiting a bullish breakout. Similarly, higher lows were also observed along the MACD and Awesome Oscillator, suggesting a revival in buying pressure.
Conclusion
If the aforementioned indicators do manage to break resistance at their mid-points, SHIB would eye an upwards breakout from its triangle. Traders can go long once SHIB establishes a leg above the 138.2% Fibonacci level and exit their trades at $0.00007209.
A stop-loss can be maintained at $0.00004550, below 10 November’s swing low.
On the flip side, a bearish outcome would be likely if SHIB slips below its 4-hour 200-SMA (green).
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