SHIBA INU (SHIB) recovers but fails to clear key resistance

SHIBA INU (SHIB) has been up since January 22nd. However, due to the weakness of the uptrend, it has yet to confirm its bullish reversal.

Important horizontal zone

SHIB has been falling since hitting an all-time high of $0.000088 on Oct. 28. The downside led to a low of $0.000017 on Jan. 22. This figure represents an 80% drop from ATH.

While SHIB started an upward move thereafter, it failed to regain the $0.000031 horizontal zone but deviated above it (red circle) before starting another decline.

Daily SHIB/USDT chart | Source: TradingView

Will SHIB make the breakthrough?

Technical indicators on the daily time frame fail to confirm trend direction as they provide mixed signals. This is visible in both the RSI and MACD.

The RSI, which is a momentum indicator, just fell below 50. This is considered a sign that the trend is slowly turning down. Furthermore, it shows that the rise above this level is just a deviation.

The MACD, formed by the short-term and long-term moving averages (MA), remains in negative territory. This means that the short-term MA is slower than the long-term MA.

Daily SHIB/USDT chart | Source: TradingView

The 6-hour chart shows that the SHIB broke above the ascending parallel channel support line earlier on February 7th.

Therefore, SHIB could recover from this level.

6-hour SHIB/USDT chart | Source: TradingView

This is supported by the hourly chart, which shows a descending parallel channel. SHIB is currently on the support line of this channel.

Therefore, the current zone is likely to start a rally.

Hourly SHIB/USDT chart | Source: TradingView

To the wave

It is possible that the ongoing decline is part of the fourth wave of a bullish impulse (white). In this case, the SHIB is currently pulling back, which contains wave 4. This is a development where a sharp decline was followed by the fifth and final wave.

A break below the first wave high (red line) at $0.000023 will negate this potential scenario.

Because wave three is long, it’s possible that wave five is small, ending just above the top of wave three.

SHIB/USDT 2 hour chart | Source: TradingView

Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions

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