Shiba Inu (SHIB) experienced a price drop following a short-term pattern that emerged on December 17, which coincided with a decline in Bitcoin‘s value, raising concerns among investors. The question arises whether this is a precursor to a worse scenario or if SHIB can quickly recover.
Looking at the weekly price movement, SHIB has been on an overall upward trajectory since hitting a low of $0.0000054 in June. A breakout occurred after November’s volatile price action, which pushed the price above a descending resistance trend line that had constrained it for 480 days.
Despite the breakout, SHIB did not demonstrate significant bullish momentum and instead fell below the descending resistance trend line (green symbol) after a sharp decline today. Additionally, over 12 million SHIB tokens were burned in the last 24 hours, marking a more than 300% increase compared to the previous day.
While the weekly timeframe appears neutral, the daily timeframe shows a bearish trend, which can be attributed to price movements and RSI readings. SHIB’s price action suggests that the altcoin has been trading within a rising parallel channel since June 2023.
Such channels often include corrective movements. Moreover, SHIB’s price broke through a symmetrical triangle formation downwards today, which is significant as it could indicate the end of an uptrend. At the time of writing, SHIB was trading around a minor support level of $0.0000095, with the RSI falling below 50, suggesting the downward trend may persist.
If the current trend continues, SHIB’s price could sustain a 20% drop, potentially visiting the channel’s support trend line at $0.0000075. However, if the $0.0000095 support level is maintained, it could trigger a 35% surge towards the channel’s resistance trend line at $0.000013.
