Shiba Inu (SHIB) price is trading inside an important support area which could start an uptrend. Closing below will hurt the potential for future price upside.
On January 13, SHIB price broke a descending resistance line that was in place since August 2022. This led to a high of $0.0000157 on 4 February. The price also reclaimed an important resistance area at the average price of $0.0000120.
Following the breakout, the daily RSI generated a bearish divergence inside an overbought zone. Moreover, Shiba Inu Token price formed a long upper wick. Later, there was a decline, which intensified on February 9. Now, SHIB token price is once again trading inside the $0.0000120 zone, validating it as a support. Since the area also coincides with the descending resistance line, this is an important level.
If SHIB price breaks down, it will throw the entire upward movement into doubt. In that case, the next closest support area would be at $0.0000102.
Shiba Inu Price Correction Begins
Technical analysis from the shorter-term six-hour time frame shows that SHIB price completed a five-wave upward move, leading to a high at $0.0000157. The defining feature of this move is the triangle that was part of wave four. In addition, wave five was extended and the lengths of waves one and three combined (black).
If the count is correct, SHIB price is now stuck in an ABC corrective formation, which could end at $0.0000108 with the 0.618 Fib retracement support level. If so, it is currently in wave B, which will start in the next 24 hours. Therefore, after the initial surge, there will be another drop to complete the correction.
After the completion of the correction, SHIB price could continue to rise to the August 2022 high of $0.0000175.
A break below the yearly low of $0.0000077 will invalidate the bullish forecast for Shiba Inu price. In that case, SHIB price could drop to $0.0000050.
To conclude, the Shiba Inu analysis shows that the price is correcting after a one-month upward move. The trend is still bullish. A drop below $0.0000077 will invalidate this bullish forecast and could send the Shiba Inu price towards $0.0000050.
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