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Caution, Shiba Inu price could undo recent gains if this happens

www.fxstreet.com 22 June 2022 04:35, UTC
Reading time: ~2 m

  • Shiba Inu price rallied 55% in nearly two days, as the crypto markets saw buys en masse. 
  • A rejection at the $0.0000104 resistance barrier is likely to trigger a 17% retracement. 
  • A daily candlestick close below $0.0000071 will catalyze a 15% crash to $0.0000060.

Shiba Inu price tagged along with other altcoins that were bouncing and witnessed decent gains. However, the rally seems to have ended around a resistance barrier, which could lead to retracement for SHIB.

Shiba Inu price reverts to the mean

Shiba Inu price showed bullish signs that led to a 31% return on June 21. This massive run-up was a common theme among many altcoins like Synthetix (SNX), Storj (STORJ), Dogecoin (DOGE), etc. 

For SHIB, between May 12 and June 13, the Relative Strength Index (RSI) produced higher lows while the price produced lower lows, creating a bullish divergence. As a result, Shiba Inu price rallied the way it did. However, this run-up now faces a threat from two directions.

First, Shiba Inu price is struggling to overcome the $0.0000104 hurdle. A rejection here could lead to a 17% descent to $0.0000095. Secondly, SHIB produced lower highs between May 30 and June 21, while the RSI created higher highs.

This setup is known as a bearish divergence and adds further credence to the 17% downswing and the possibility of a retracement in general. Therefore, investors need to pay close attention to today’s price action.

SHIB/USDT 4-hour chart

SHIB/USDT 4-hour chart

While things are looking bullish at the moment, investors need to pay attention to the RSI. This indicator shows a bearish divergence and forecasts a correction. However, if Shiba Inu price produces a daily candlestick close above $0.0000104, it could potentially rally 33% to $0.0000139.

Overcoming this significant resistance barrier will put a rest to the correction thesis described above.

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