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Shiba Inu Falls Lower In Tandem With Dogecoin But Bulls Need Not Worry: A Technical Analysis

Published 05/07/2023, 16:48
Updated 05/07/2023, 18:10
© Reuters.  Shiba Inu Falls Lower In Tandem With Dogecoin But Bulls Need Not Worry: A Technical Analysis

Benzinga - Shiba Inu (CRYPTO: SHIB) was sliding over 2% lower during Wednesday’s 24-hour trading session, in tandem with Dogecoin, which was dropping about 3%.

The Shiba Inu-themed cryptos have each seen decreasing volume since June 30, when Shiba Inu and Dogecoin experienced big bullish volume, which helped them to break up from bullish patterns.

Shiba Inu broke up that day from a falling channel pattern, which Benzinga pointed out was likely to happen two days prior. Shiba Inu’s decreasing volume, paired with slightly lower prices, suggests the stock’s experiencing a period of consolidation.

Volume is the total number of shares traded in a security within a specific period of time. It’s a momentum indicator used by technical traders to gauge overall interest and sentiment in a stock. Volume is also used as an indicator to confirm a trend or trend change.

When bullish trading volume increases, the share price of the stock usually moves higher whereas increasing bearish volume, when a stock is in a downtrend, usually pushes the price lower. In contrast, lower-than-average trading volume usually indicates consolidation, which results in the stock trading sideways.

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The Shiba Inu Chart: When Shiba Inu fell lower Wednesday on lower-than-average volume, the crypto bounced up from a support level at $0.00000738 and wicked from the area. If Shiba Inu closes the session above about $0.00000750, Shiba Inu will print a bullish hammer candlestick, which could indicate the local low has occurred and the crypto will bounce on Thursday.

  • Shiba Inu is trading in an uptrend, with the higher high formed on Tuesday at $0.00000786 and the most recent lower low formed at the $0.00000742 mark on July 2. If Shiba Inu bounces on Thursday, the stock may also react to a double bottom pattern near the $0.00000740 mark, which was printed on July 2 and Wednesday.
  • If Shiba Inu bounces over the next few days, bullish traders want to see the crypto regain the 50-day simple moving average (SMA) as support, which Shiba Inu rejected on July 2. Bearish traders want to see big bearish volume come in and knock Shiba Inu back into the channel pattern, which could continue to drag the crypto lower.
  • Shiba Inu has resistance above at $0.00000793 and $0.00000856 and support below at $0.00000738 and $0.00000694.
Read Next: Binance Under Scrutiny: Australia's Financial Watchdog Investigates Crypto Giant's Derivatives Business

Photo: Shutterstock

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© 2023 Benzinga does not provide investment advice. All rights reserved.

Read the original article on Benzinga

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