The bears were attempting to break Shiba Inu down from a double inside bar pattern, but having some difficulty due to lower-than-average volume.
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..
On Wednesday, Shiba Inu was giving back the gains it made on Tuesday, when the crypto sector moved higher in tandem with Bitcoin. The crypto could be settling into a bear flag pattern on the daily chart, which it began to form on Monday.
- If the bear flag is recognized, the measured move is about 10%, which suggests the crypto could drop toward the $0.0000740 mark. If that happens, Shiba Inu could reach a new 52-week low.
- Bullish traders want to see Shiba Inu continue to trade sideways and then for big bullish volume to come in and drive the crypto up above the eight-day exponential moving average, which would negate the bear flag. Alternatively, if Shiba Inu drops to the $0.00000774 level and bounces, a double bottom pattern will form, which could be bullish for future price action.
- Shiba Inu has resistance above at $0.00000793 and $0.00000856 and support below at $0.00000738 and $0.000006.
Produced in association with Benzinga
Edited by Saba Fatima and Newsdesk Manager