Shiba Inu Crawls Yawns As Market Falls: The Bull, Bear Case For The Dogecoin Killer

Shiba Inu SHIB/USD was trading mostly flat Wednesday, showing strength in comparison to the general market, which saw the S&P 500 falling almost 1%.

The crypto sector has been trading mostly horizontally since Aug. 18, with Bitcoin and Ethereum holding near $25,000 and $1,600, respectively.

Shiba Inu, which broke down from a triangle pattern on Sept. 1, has settled into a falling channel pattern on on the 24-hour chart and on Wednesday, the crypto attempted to break up from the formation but failed.

Within the channel, Shiba Inu has been making lower lows and lower highs between the two parallel trendlines. The pattern is bearish for the short term but can be bullish down the road.

Learn more about cryptocurrencies like Shiba Inu at Benzinga's Future of Digital Assets conference.

For bearish traders, the "trend is your friend" (until it's not) and the stock is likely to continue downward. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.

Bullish traders will want to watch for a break up from the upper descending trendline, on high volume, for an entry. When a stock breaks up from a descending channel, it's a powerful reversal signal and indicates a rally is likely in the cards.

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The Shiba Inu Chart: Shiba Inu’s temporary break up from the channel pattern took place on lower-than-average volume, which was an indication of a bull trap. If the crypto breaks up from the channel again, bullish traders want to see it occur on higher-than-average volume, which could signal a longer-term reversal to the upside.

• Until the crypto breaks up from the channel or develops an alternative pattern, Shiba Inu is likely to continue trending lower within the formation. If that occurs, bullish traders want to see the crypto print a double-bottom pattern near the $0.00000726 mark; otherwise, the bears may gain control and accelerate the downside pressure.
• Shiba Inu has resistance above at $0.00000793 and at $0.00000856 and support below at $0.00000738 and at $0.00000694.

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