Shiba Inu: Will this bullish pattern push SHIB above $0.00003 this week?

Saif Naqvi
Shiba Inu
Source: Pixabay

A cup and handle pattern is slowly taking shape on the Shiba Inu chart, and the same could have drastic implications on its price. Although the technical pattern pertains to a higher price, investors would have to wait out the second correctional phase before a breakout.

Source: TradingView

Price-wise, Shiba Inu has had a topsy-turvy March. During the first half of the month, SHIB declined steadily from $0.00002963 and hit a near 1-month low at $0.00002129. The latter half marked recovery, with SHIB regaining momentum and revisiting its earlier high. Interestingly, a trendline plotted across these highs and lows suggested that an early ‘cup and handle pattern was in formation.

In technical terms, a cup and handle is a bullish development that leads to higher prices. The pattern contains three elements – the cup, handle, and neckline (resistance). Normally, the neckline triggers a minor correction which, in turn, shapes the handle. Now, since SHIB’s handle was yet to form, the next logical phase was the said minor correction.

Bulls Losing Momentum?

Source: TradingView

Tuning in on the 4-hour chart showed that bulls were already losing near-term market control. Three lower highs were formed over the past couple of days and the MACD and RSI were starting to favor sellers.

Source: Messari

Furthermore, SHIB’s Sharpe Ratio was also trading at extreme levels. In 2022, this ratio has climbed above 2 only on three occasions, and each time, a correction has followed. The Sharpe Ratio helps determines the risk involved with holding a particular investment. Although a higher value indicates greater returns, it can sometimes lead to profit-booking.

Shiba Inu Direction

If a price decline does follow suit, investors can keep an eye out for near-term supports of $0.00002560 and $0.00002427. However, keep in mind that according to the pattern, the price would eventually break above the $0.00002848 resistance once the correction runs its course.

At the time of writing, SHIB traded at $0.00002728, down by 1.6% over the last 24 hours.