The meme currency displayed a double bottom or 'W' pattern on the weekly time frame, which indicates that the first quarter is likely to be bullish.
Despite the fact that SHIB is now trading below $0.0000100, it is still a significant distance away from the bullish invalidation level of $0.00000944.
In the first few trading days of 2024, the price of Shiba Inu (SHIB) followed an unexpected path, which contradicted the assumptions that the year would get off to a strong start. The meme coin has not only dropped on the charts, but it has also almost invalidated a key bullish reversal technical pattern, which has increased the levels of anxiety among investors in this cryptocurrency on the possibility of greater declines in the future.
The Shiba Inu animal does not exhibit a bullish trend.
As a result of the Matrixport report that said the United States Securities and Exchange Commission (SEC) will reject the applications of spot Bitcoin ETFs, the price of Shiba Inu dropped by about 5% on the weekly chart on Friday. This occurred after the cryptocurrency market saw a decline subsequent to the news. The alternative cryptocurrency was able to break through a significant support level of $0.0000102, and it is now trading at $0.0000098 at the time of this writing.
Due to the fact that it forms the neckline of the double bottom technical pattern, also known as the 'W' pattern, which can be seen on the weekly chart, this particular price point is significant for the meme currency. The formation of this pattern, which is often referred to as a bullish reversal pattern, occurs when an asset reaches two consecutive lows at the same level during successive trading sessions.
When the price falls to the same level twice, that level is regarded to be the support level. When it comes to SHIB, this support level is denoted by the value $0.0000066. The alternative cryptocurrency has recovered from this level twice, first at the beginning of June and once again in the last week of October.
The height of the double bottom pattern is taken into consideration in order to determine the target at the time of inference for this pattern. An rise that is comparable to the breakout level, which is also referred to as the neckline, is the growth that is anticipated. The objective for Shiba Inu is located at $0.0000138, which is approximately 35% higher than the breakout level. The breakout level for Shiba Inu is noted at $0.0000098, and the height of the pattern sets the target at there.
The price of Shiba Inu was on course to do this, but the drop that occurred this week caused the meme currency to plummet through the neckline to its current position. The bullish reversal pattern, on the other hand, has not been entirely disproved since the stop loss value has been established at $0.0000094.
In the event that SHIB also breaks through the stop loss, the pattern would be rendered worthless, and investors would notice a plunge to $0.0000080 or below.
However, if the meme currency is pulled back up by the wider market signals and the price of Shiba Inu breaks through the entry point that is shown at the neckline, then it may have another opportunity to achieve the 35% rally towards the measured goal.
