Shiba Inu SHIB/USD was trading flat during Tuesday’s 24-hour trading session, left behind by Dogecoin DOGE/USD, which was spiking over 6% higher as it attempted to break up from a double inside bar pattern that Benzinga pointed out on Monday.
The two Shiba Inu-based cryptocurrencies have been trading in uptrends since Nov. 22, but Dogecoin has shown comparative strength, soaring about 40% higher, while Shiba Inu has rebounded a more conservative 11%.
Like Dogecoin, Shiba Inu is trading in an inside bar pattern on the daily chart, which may indicate consolidation prior to another leg higher — if the general crypto sector cooperates.
An inside bar pattern indicates a period of consolidation and is usually followed by a continuation move in the direction of the trend.
An inside bar pattern has more validity on larger time frames (4-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.
- Bullish traders will want to search for inside bar patterns in stocks or cryptos that are in an uptrend. Some traders may take a position during the inside bar prior to the break, while other aggressive traders will take a position after the break of the pattern.
- For bearish traders, finding an inside bar pattern on a stock or crypto that's in a downtrend will be key. Like bullish traders, bears have two options where they can take a position to play the break of the pattern. For bearish traders, the pattern is invalidated if the stock rises above the highest range of the mother candle.
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The Shiba Inu Chart: During Tuesday’s 24-hour trading session, Shiba Inu was trading in a tight range completely within Monday’s trading range, which has settled the crypto into an inside bar pattern.
Shiba Inu’s inside bar pattern leans bullish because the crypto was trading higher prior to the formation.
- Both bullish and bearish traders will be watching to see which way Shiba Inu breaks from Monday’s mother bar later on Tuesday or on Wednesday to gauge future direction. Traders will want to see the break come on higher-than-average volume to indicate the pattern was recognized.
- If Shiba Inu breaks bullishly from the pattern, the crypto will regain support at the 21-day exponential moving average (EMA), which may give bullish traders more confidence going forward. If that happens, and Shiba Inu can pop up above $0.00000961, the crypto will also confirm an uptrend is intact.
- If Shiba Inu falls under Monday’s low-of-day, the uptrend will be negated and a downtrend may occur.
- Shiba Inu has resistance above at $0.00000924 and $0.00000975 and support below at $0.00000856 and $0.00000738. There is also psychological resistance above at $0.00001.
Photo via Shutterstock.
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