SHIB Price Analysis: Will Shiba Inu’s Rally Sustain or Face Further Declines?

SHIB Price Analysis: Will Shiba Inu’s Rally Sustain or Face Further Declines?

Shiba Inu‘s price saw a recovery earlier on Tuesday during the London trading session, recouping some of the losses from the previous day’s market downturn. Despite recent challenges, the SHIB price chart is displaying a bullish outlook, as the token emerged as one of the top gainers in the broader market recovery, showing one of the highest correlations to Bitcoin.

Can Shiba Inu’s Price Rally Sustain?

Currently, SHIB is in a downward trend, as reflected by the descending wedge pattern on the chart. The latest candlestick is a small green one following a series of red candles, indicating a potential short-term reversal or a consolidation phase within the descending wedge. The pattern itself often suggests a corrective phase that could lead to a bullish breakout, but confirmation is needed.

The 50-day Exponential Moving Average (EMA) is positioned at $0.00001734, while the 200-day EMA is at $0.0000186, both sitting above the current price, reaffirming the overall bearish trend, according to data from CoinGecko.

On the downside, Shiba Inu has an immediate support level around $0.0000115, with a stronger support zone between $0.00001 and $0.000011, marked by the grey area on the chart. This zone also contains a fair value gap, which was filled during yesterday’s market drop. Additionally, this was the last zone of market imbalance for SHIB, suggesting that the recent dip may have run its course.

On the resistance side, there is some overhead pressure at $0.00001734 (50-day EMA), followed by $0.00001860 (200-day EMA), with a significant resistance zone between $0.00002500 and $0.00003000. If the price fails to break above the 50-day EMA, it could decline by 41% to $0.00001135, aligning with the bottom trendline of the falling wedge and falling into the FVG zone.

The Relative Strength Index (RSI) currently sits at 33.01, near the oversold territory, indicating a potential short-term bounce despite the prevailing bearish sentiment. Meanwhile, the Chaikin Money Flow (CMF) is at -0.01, suggesting mild selling pressure.

If Shiba Inu’s price can break above the 50-day and 200-day EMAs, it could signal a shift in market sentiment, potentially turning the asset bullish. Such a breakout from the falling wedge could propel SHIB’s price to $0.00002796, representing a 102% increase, effectively invalidating the bearish outlook.