The Shiba Inu has fallen 85% from the May 10 high of $0.00003999 to the May 19 low of $0.00000607. The dog-themed token is now defining a symmetrical triangle pattern level on the four-hour chart that is near completion. Over 75% of the symmetrical triangles are continuation patterns, so probabilities dictate that Shiba Inu should resolve the pattern to the downside shortly.
The symmetrical triangle formation, sometimes referred to as a coil, tends to form during a trend as a continuation pattern. The work by Edwards and Magee, “Price Technical Analysis of Stock Trends” (1948), suggests that 75% of symmetrical triangles are continuation patterns and the remaining are reversal formation. The reversal formation patterns are challenging to analyze and frequently have false breakouts.
The symmetrical triangle pattern level is contained by at least two reaction highs and two reaction lows. When the lines are connected, they converge as they are extended, creating a symmetrical triangle pattern.
Since May 19, SHIB has been quietly forming a symmetrical triangle with three reaction lows and three reaction highs. SHIB is initiating an attempt to price break out to the upside. Based on the widest distance of the symmetrical triangle and applied to the breakout point, the measured move target is at $0.00001337, or a gain of 50%.
The 50% SHIB price rally would elevate beyond the 40 four-hour simple moving average at $0.00001119 and the 23.6% Fibonacci retracement level of the SHIB decline from May 10 at $0.00001325.
As price upside breakouts are rare and prone to failure, it is a crucial level to consider the downside. The measure move target for Shiba Inu price is at $0.00000347 based on the widest distance of the triangle. An alternative way is to establish a parallel line to the symmetrical triangle’s upper trend line which yields a measured move target price of $0.00000287, or a 58% decline from the triangle’s lower trend line
At this moment, the upward resolution of the SHIB symmetrical triangle signifies a potential break from the 85% decline since May 10. Crypto Traders should consider initiating a position on the Shiba Inu breakout but do so in consideration of the price probabilities mentioned above and with a relatively tight stop loss. Moreover, it is important not to overlook the consecutive inside days on the bar chart. An important quote to keep in mind when understanding SHIB price action is that “price contraction leads to price expansion.”
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