- Shiba Inu price is drifting lower along the 50 four-hour simple moving average (SMA).
- SHIB symmetrical triangle breakout on May 24 remains live, despite minor pullback.
- Consecutive inside days raise the probability of a significant range expansion in the coming hours.
Shiba Inu price has drifted downwards since the May 24 breakout, finding support at the symmetrical triangle’s upper trend line and resistance at the 50 four-hour SMA. A four-hour close above the moving average should ignite a new rally of at least 50% from price at the time of writing.
Shiba Inu price contraction leads to price expansion
The symmetrical triangle pattern, sometimes referred to as a coil, tends to form during a trend as a continuation pattern. The work by Edwards and Magee, “Technical Analysis of Stock Trends” (1948), suggests that 75% of symmetrical triangles are continuation patterns and the remaining are reversals. The reversal patterns are challenging to analyze and frequently have false breakouts.
From May 19 until May 24, Shiba Inu price created a symmetrical triangle pattern with two reaction highs and three reaction lows and a measured move target of $0.00001450, or a gain of 50%.
The May 24 breakout to the upside went against historical precedent, but it has not failed as SHIB remains above the triangle’s upper trend line and well above the triangle’s lower trend line.
Shiba Inu price rests at the 50 four-hour moving average and below the declining trend line from the May high. A four-hour close above the two points of resistance will enable SHIB to gain price traction and rally towards the original measured move target of $0.00001450. It would be more than a 50% gain from price at the time of writing.
The rally will encounter resistance at the May 24 high at $0.00001204, the May 16 low at $0.00001238 and the 23.6% Fibonacci retracement of the decline beginning on May 10 at $0.00001325.
If the cryptocurrency complex continues to rebound and FOMO seizes Shiba Inu price, SHIB could reach the 38.2% retracement at $0.00001793.
It is essential not to overlook the consecutive inside days on the bar chart. An important quote to keep in mind when evaluating price action is that “price contraction leads to price expansion.”
SHIB/USD 4-hour chart
A decline below the triangle’s lower trend line, currently at $0.00000722, would signal the end of the rally attempt and introduce a bearish narrative for Shiba Inu price. A decline below the May 19 at $0.00000607 would confirm the negative outlook.