Shiba Inu Price Forecast: A 31% crash awaits should SHIB lose this critical support level
|- Shiba Inu price has been trending downward since the end of December, extending the decline to $0.00000875.
- The rounding top pattern formed by SHIB indicates a bearish outlook, implying a 31% correction is likely.
- Heavy bearishness on the price indicators, as well as a lack of supporting cues from the broader market, suggest further drawdown is possible.
Shiba Inu price is nearing a crucial bearish reversal, and a confirmation of the same would mean that the meme coin should note a significant decline over the coming days. If this drawdown is completed successfully and SHIB reaches the target price, a new all-time low will be formed.
Shiba Inu price under bearish threat
Shiba Inu price is currently forming a rounding top pattern after rallying throughout December and initiating a decline toward the end of it that extended over the past three weeks. The meme coin nearly ensured that the pattern would fail, but it failed to breach the $0.00000968 barrier marked as the stop loss.
As it failed the breakthrough, the meme coin corrected to fall to the retest line at $0.00000846, trading above it at the time of writing. Now, if the Shiba Inu price falls through this retest line, the rounding top pattern will be validated, and SHIB will be susceptible to a decline.
A rounding top is a bearish reversal pattern that signals a potential shift in the prevailing trend. As the rounding top develops, trading volumes often decline, indicating diminishing enthusiasm from buyers, which is the case with Shiba Inu at the moment.
The pattern is confirmed when the price breaks below the aforementioned retest level at the bottom of the rounding formation. This fall signals a shift from bullish sentiment to potential bearish momentum, and traders may anticipate a trend reversal.
This fall will likely extend into a crash, and based on the pattern, the target price is marked at $0.00000584, which would result in a 31% correction. If this level is tagged, not only would the pattern be successful, but Shiba Inu price would also note its new all-time low.
SHIB/USD 12-hour chart
Both the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) are heavily bearish presently, indicating that a decline is not completely out of the question.
Shiba Inu RSI and MACD
However, if the broader market cues note a reversal due to a surge in demand over low prices, SHIB could bounce back from the retest level and bounce back. A breach of the stop loss at $0.00000968 would invalidate the bearish thesis and enable recovery to $0.00001000 and beyond.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.