2023-11-1 19:54 |
The Shiba Inu (SHIB) token burn has reduced the circulating supply but has yet to have a noticeable effect on the price.
SHIB still trades below a long-term descending resistance trendline despite breaking out from a short-term channel.
Shiba Inu Consolidates in Long-Term PatternThe weekly timeframe chart reveals that Shiba Inu’s price has declined below a descending resistance trendline since August 2022.
This trendline recently caused a rejection in August 2023 (red icon), leading to a further decline in SHIB’s price, which hit a low of $0.0000066 in October.
While there is a possibility that SHIB’s price is trading within a descending wedge, the support line (dashed) has not been validated sufficiently. The nearest horizontal support zone can be found at $0.0000060.
The Relative Strength Index (RSI), a crucial indicator for assessing market conditions, shows an undetermined reading for SHIB.
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In general, when the RSI reading is above 50, and the trend is upward, bulls have the upper hand. Conversely, if the RSI reading falls below 50, the opposite holds true.
In the case of SHIB, the RSI is increasing but is below 50, a sign of an undetermined trend.
SHIB/USDT Weekly Chart. Source: TradingViewOn October 28, 250 million SHIB tokens were burned. This reduces the circulating supply and follows the trend of the past seven days, where more than 500 million tokens have been burned.
The Shiba Inu team announced on October 28, stating:
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The countdown is officially underway. Get ready for a game-changer that’ll shake the crypto sphere! #SHIBARMY
The countdown for this surprise identity launch will take place at 19:38 CET today.
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SHIB Price Prediction – Will It Kickstart Reversal?The daily timeframe analysis provides a more positive perspective for the altcoin.
The SHIB price had been trading within a descending parallel channel since August 14. Such channels typically involve corrective actions, suggesting that SHIB might experience a breakout soon.
SHIB finally managed to move above the trendline on October 22.
The increase preceded a bullish divergence in the RSI (green). This is a type of bullish occurrence where a momentum increase follows a price decrease.
Additionally, the RSI rising above 50 signals that the Shiba Inu breakout is legitimate and could lead to further gains.
If the upward momentum continues, SHIB’s price could increase by 45% and reach the next resistance at $0.0000110, causing a breakout from the long-term descending resistance trendline.
So, it could catalyze an even longer-term bullish trend reversal.
SHIB/USDT Daily Chart. Source: TradingViewDespite this bullish SHIB price prediction, failure to move above the 0.382 Fib retracement resistance level at $0.0000085 can cause a 10% drop, validating the short-term horizontal support at $0.0000070.
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The post Can Shiba Inu (SHIB) Price Rally After 250 Million Token Burn? appeared first on BeInCrypto.
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