Price of Shiba Inu aims for recovery but increase is limited by multiple obstacles to come
- The price of the Shiba Inu has collapsed in a downward parallel channel as it continues to lack determination and commitment.
- While technical indicators suggest a trend reversal, the upside potential for SHIB is limited.
- Possible bullish targets for Shiba Inu appear to be out of reach until he breaks critical resistance levels.
The price of the Shiba Inu was sealed in a downward consolidation pattern that began on July 6. A technical indicator presented a buy signal at a crucial support level, pointing to a potential recovery in the near term.
Shiba Inu price struggles to thrive on buy signal
The price of Shiba Inu broke out of a downward resistance trendline on June 29 that trapped the SHIB for 41 days.
Shiba Inu quickly traded this trendline for support, however, SHIB lost this defense zone on July 13 when a red candlestick closed below this level.
On the 12-hour chart, the price of the Shiba Inu has been trapped in a descending parallel channel, consistently forming higher lows and higher lows.
While the dominant direction of this chart pattern suggests that the SHIB price may continue to decline, the momentum reversal indicator has given a buy signal. The Relative Strength Index, which showed that Shiba Inu was oversold on July 16, adds credence to the recovery thesis.
12 Hour SHIB / USDT Chart
However, a recovery target might have limited upside potential for the price of Shiba Inu, as it faces many hurdles. SHIB needs to climb above the aforementioned downtrend line to be able to reverse the period of underperformance.
If Shiba Inu sees increased interest, SHIB could aim for the next target at the 27.2% Fibonacci extension level, coinciding with the 12-hour simple moving average (SMA) at $ 0.00000750.
Investors should note that greater aspirations beyond this level are unlikely in the short term, as the Shiba Inu price meets a resistance line given by the IRM, corresponding to the 50 and 100 twelve hour SMAs at 0, $ 00000776.
On the contrary, if the SHIB bears continue to gain control of the market, the price of Shiba Inu could slide below the middle limit of the chart pattern, which acts as the first line of defense.
If the price of Shiba Inu were to experience an increase in selling pressure, the SHIB could once again end up in the demand zone of $ 0.00000560 to $ 0.00000634.