Shiba Inu Price Prediction: SHIB may have laid a bull trap, as $0.00000711 becomes pivotal
|- Shiba Inu price reverses cup-with-handle breakout with the largest negative day since June 21.
- SHIB daily Relative Strength Index (RSI) reaches the first overbought reading since the May crash.
- The union of the 50-day simple moving average (SMA) with the handle low of $0.00000711 needs to hold to keep the breakout live.
Shiba Inu price shaped a cup-with-handle base through July and early August before triggering on August 16 with a daily close above the handle high of $0.00000887. The breakout has quickly introduced profit-taking, suggesting a bear trap and putting the 36% measured move of the SHIB base in doubt.
Shiba Inu price plots new opportunity, but investors are not convinced
On August 16, Shiba Inu price triggered a constructive base after weeks of false attempts or erratic price structures. However, the breakout was met with a -10.75% reversal on August 17, marking the most significant daily decline since June 21. The potential bear trap has put SHIB investors on the defensive, with the meme token showing a double-digit loss from the handle high entry price.
The lack of conviction and resulting Shiba Inu price reversal has spotlighted the support framed by the 50-day SMA at $0.00000729 with the handle low of $0.00000711. It is the make-or-break level for the cup-with-handle breakout based on a daily close, and it would represent a loss of 20% from the SHIB handle high entry price.
A failure to hold $0.00000711 would quickly flip the Shiba Inu price outlook to bearish, exposing SHIB to a test of the July 20 low of $0.00000570 or the June low of $0.00000550 and a loss of -22.64% from the handle low.
SHIB/USD daily chart
The sharp reversal on August 17 may be a brief reaction to the overbought reading on the daily RSI and not a bull trap. To confirm a renewal of the breakout, Shiba Inu price needs to log a daily close above the breakout high of $0.00000949 printed on August 16. Otherwise, SHIB speculators will be locked in a directionless cryptocurrency, undermining the base legitimacy and the bullish narrative developing since the 23.30% bounce on August 7.
With the cryptocurrency market manufacturing impressive gains in several altcoins, Shiba Inu price finally caught a bid, thrusting SHIB from a constructive base, but investors’ conviction barely lasted a day. It is a reminder of the challenges inherent in trafficking in outlier cryptocurrencies and now emphasizes the importance of $0.00000711.
Here, FXStreet's analysts evaluate where SHIB could be heading next as it seems primed for a correction before another run-up.
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.