Analyst Shows How Shiba Inu Bollinger Bands Contraction Suggests Imminent Upsurge
thecryptobasic.com 14 September 2024 11:54, UTC A recent report from market analyst CryptoCheck suggests that Shiba Inu might be on the brink of an explosive price rally.
Using the Bollinger Bands strategy alongside other key indicators, CryptoCheck believes SHIB is set for an imminent upsurge. The contraction of Bollinger Bands in particular, often seen as a precursor to sharp price movements, provides the foundation for this optimistic outlook.
Shiba Inu Bollinger Bands Contraction
CryptoCheck’s analysis focused on the Bollinger Bands contraction observed on the 1-day Shiba Inu chart. Bollinger Bands measure market volatility, and when they contract, it indicates a period of reduced volatility or consolidation.
According to CryptoCheck, the current contraction is particularly tight, suggesting a potential large price movement in the near future.
When these bands eventually expand, it often results in a significant price swing, either upward or downward. Based on other supporting indicators, CryptoCheck leans towards the likelihood of an upward movement for SHIB.
The SHIB RSI
The Relative Strength Index (RSI) has been low for an extended period, with signs of bottoming out. CryptoCheck noted that the RSI recently touched its lowest point of the year, suggesting that Shiba Inu is oversold.
This oversold condition typically precedes a price reversal, as buyers begin to scoop up the asset at low prices, driving demand and, ultimately, the price higher. According to the analyst, this bottoming of the RSI adds strong support to the bullish case.
Shiba Inu V-Shape Recovery
Another indicator suggesting a potential bullish breakout is the V-shaped recovery that CryptoCheck identified in the 4-hour chart. Notably, SHIB dropped from $0.00001726 on July 3 to $0.00001266 on July 5. However, it immediately recovered above $0.000017 by July 7.
The rapid drop followed by an equally rapid recovery shows that buyers were quick to react and purchase at lower levels, reinforcing the narrative that SHIB has strong support at its current price range. This type of price action is often seen as a reversal pattern.
Despite these positive signs, CryptoCheck emphasized that the price needs to break above a critical trendline to confirm the bullish outlook.
In the charts, the SHIB price hovers just below this trendline, which has acted as a resistance level for some time. If SHIB can close above this line, CryptoCheck suggests that a strong buy signal will be triggered, potentially sending the price much higher.
However, CryptoCheck also acknowledged the possibility that if SHIB fails to break above the trendline and loses its higher lows, the bullish scenario could be invalidated. Consequently, while the signs are currently positive, investors should watch this key level.
The Bollinger Band strategy and other technical tools point to the potential for history to repeat itself. These indicators further suggest that Shiba Inu may have found its local bottom, and the next phase could be another upward cycle. SHIB currently trades for $0.00001383 at press time.
