Shiba Inu Outpaces Dogecoin But Enters A Bear Flag Pattern

Shiba Inu SHIB/USD was rising slightly higher during Wednesday’s 24-hour trading session, outpacing Dogecoin but trading in the same double inside bar pattern.

Although Shiba Inu has popped higher over the last two days, the stock may be settling into a bear flag pattern. The bear flag pattern is created with a steep drop lower forming the pole, which is then followed by a consolidation pattern that brings the stock or crypto higher between a channel with parallel lines or into a tightening triangle pattern.

For bullish traders, the "trend is your friend" (until it's not) and the stock or crypto may continue to rise upward within the following channel for a short period of time. Aggressive traders may decide to purchase the stock at the lower trendline and exit the trade at the higher trendline.

Bearish traders will want to watch for a breakdown from the lower descending trendline of the flag formation, on high volume, for an entry. When a stock or crypto breaks down from a bear flag pattern, the measured move lower is equal to the length of the pole and should be added to the highest price within the flag.

A bear flag is negated when a stock closes a trading day above the upper trendline of the flag pattern or if the flag rises more than 50% up the length of the pole.

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The Shiba Inu Chart: Shiba Inu’s possible bear flag was created between Sept. 8 and Wednesday, with the downward sloping pole formed over the first four days of that time frame and the flag created since. The measured move of the flag is about 8.5%, which suggests the crypto could fall toward $0.00000674.

• The crypto is also trading in a downtrend, making a series of lower highs and lower lows. The most recent lower low was formed on Monday at $0.00000696 and the most recent lower high was printed at the $0.00000779 mark on Sept. 6.
• Bullish traders want to see Shiba Inu regain the eight-day exponential moving average, which would negate the bear flag, and then for the relative strength index to rise, suggesting bullish momentum is returning to the crypto.
• Bearish traders want to see the crypto break down from the flag formation on higher-than-average volume, which will confirm the bear flag and indicate the downtrend remains intact.
• Shiba Inu has resistance above at $0.00000738 and at $0.00000774 and support below at $0.00000694 and at $0.000006.

Photo via Shutterstock.