Benzinga - Shiba Inu (CRYPTO: SHIB) was trading mostly flat during Tuesday’s 24-hour trading session after rejecting the 50-day simple moving average (SMA) for the fourth straight day in a row.
On Monday, Shiba Inu popped up over 8% at one point, likely in response to Dogecoin (CRYPTO: DOGE), which surged about 32% after Elon Musk changed Twitter’s icon from a bird to a doge image.
Dogecoin was also trading flat, consolidating sideways with an inside bar pattern, which Benzinga said on Monday was likely. Similarly, Shiba Inu was forming an inside bar pattern, with all of Tuesday’s price action taking place within Monday’s trading range.
An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the current trend.
An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an "inside bar."
A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.
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The Shiba Inu Chart: Shiba Inu’s inside bar leans bullish, because the crypto was trading slightly higher before forming the pattern. The consolidation under the 50-day SMA is also bullish, and traders can watch for Shiba Inu to break up from the inside bar pattern on higher-than-average volume to regain the level.
- Shiba Inu is also trading in an uptrend, making a series of higher highs and higher lows. The crypto's most recent higher high was formed on Monday at $0.00001170 and the most recent higher low was printed at the $0.00001051 level on that same day.
- If the uptrend continues, Shiba Inu will break bullishly from Monday’s mother bar. The 200-day SMA, which Shiba Inu is trading above, is also likely to act as support on a potential bearish break.
- Bearish traders want to see big bearish volume come in and break the crypto down from Monday’s range on high volume, which would cause Shiba Inu to lose support at the 200-day SMA. If That happens, Shiba Inu could enter into a bear cycle.
- Shiba Inu has resistance above at $0.00001178 and $0.00001259 and support below at $0.00001081 and $0.00000975.
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