Shiba Inu Drops To Floor Of Rising Channel, Attempts To Jump: The Bull, Bear Case

Shiba Inu SHIB/USD was dropping over 2% Thursday, in tandem with the crypto sector and the general stock market, which saw Bitcoin and the S&P 500 losing 2% and 1%, respectively, following a hawkish statement from the Federal Reserve.

The “Dogecoin Killer’s,” move lower saw the crypto testing the lower trend line of a rising channel pattern as support. The pattern is bullish for the short term but can be bearish down the road.

For bullish traders, the "trend is your friend" (until it's not) and the stock is likely to continue upwards. Aggressive traders may decide to buy the stock at the lower trend line and exit the trade at the upper trend line.

Bearish traders will want to watch for a downward break from the lower ascending trend line, on high volume, for an entry. When a stock breaks down from a rising channel, it's a powerful reversal signal and indicates a downturn is likely in the cards.

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The Shiba Inu Chart: Shiba Inu started trading in its most recent rising channel on Sept. 17 after breaking down from a previous rising channel pattern. During Thursday’s 24-hour trading session, the crypto was attempting to bounce up from the lower trend line of the formation, possibly forming a higher low.

• On Thursday, Shiba Inu also tested the upper trend line of the channel and rejected the area. The top of the channel currently aligns with the 21-day exponential moving average (EMA), adding further resistance near the $0.00000754 level.
• Bullish traders want to see Shiba Inu continue to trend higher within the channel until the crypto regains the 21-day EMA as support. If that happens and the crypto can remain above that area for a period of time, the eight-day EMA will cross above the 21-day, which would give bullish traders more confidence going forward.
• Bearish traders want to see big bearish volume come in and drop Shiba Inu down from the channel, which would throw the crypto into a new downtrend.
• Shiba Inu has resistance above at $0.00000738 and at $0.00000798 and support below at $0.00000694 and at $0.000006.