Shiba Inu (SHIB) Price Bounces Amidst Accelerated Token Burn

The Shiba Inu (SHIB) price bounced on January 8, validating a horizontal support area while doing so.

Can SHIB sustain its bounce and break out from its corrective pattern, or will more downside follow?

Shiba Inu Breakout and Retest

The technical analysis on the weekly timeframe reveals that SHIB’s price experienced a decline beneath a descending resistance trend line starting from August 2022, reaching a low of $0.0000054 in June 2023. 

Despite the drop, SHIB showed resilience and has recovered since.

After numerous unsuccessful attempts to break out, SHIB broke through the descending resistance trend line in December, which had been in place for over 480 days.

Despite reaching a peak of $0.000011 post-breakout (red icon), the price has since declined. Last week, SHIB confirmed the former resistance line as support (green icon) before rebounding.

SHIB/USDT Weekly Chart. Source: TradingView

In assessing market conditions, traders commonly utilize the Relative Strength Index (RSI) as a momentum indicator to gauge whether a market is overbought or oversold, influencing decisions to buy or sell an asset.

An RSI reading above 50 in an upward trend suggests a bullish advantage, while a reading below 50 indicates the opposite. Currently, the RSI is above 50, signaling a bullish trend.

SHIB Price Prediction: Bounce or Breakdown?

Similarly to the weekly chart, the daily one leans bullish.

Even though SHIB has fallen since the resistance trend line of an ascending parallel channel rejected it on December 17, SHIB found support above a horizontal support area on January 8, creating a bullish candlestick (green icon).

The bounce validated the $0.000009 horizontal area as support. Currently, SHIB attempts to move above the channel’s midline.

Despite this bounce, the daily RSI has not moved above 50, something that would confirm the bullish trend.

The SHIB token burn is continuing at an accelerated rate. Today, the team tweeted:

In the past 24 hours, there have been a total of 36,370,584 $SHIB tokens burned and 5 transactions.

This is an increase of more than 600% relative to the past 24 hours. Similarly, the weekly burn increased by over 11,000%.

If SHIB moves above the channel’s midline, it will confirm the bonce. Then, it can increase 28% to the resistance trend line at $0.000012.

SHIB/USDT Daily Chart. Source: TradingView

Despite this bullish SHIB price prediction, closing below the $0.000009 support area will invalidate the bounce. Then, SHIB can fall 23% to the channel’s support trend line at $0.000008.

For BeInCrypto’s latest crypto market analysis, click here.

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