What’s next for Shiba Inu as he hits the brakes for now?

By October 31, 2021Polkadot
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Shiba Inu’s phenomenal bull run during October propelled it to the upper echelons of mid-large cap cryptocurrencies. For a brief moment, SHIB outperformed the likes of Polkadot and Dogecoin on the crypto ladder, before sliding down to the 10th position after a correction.

The digital asset finally paused after breaking an ATH at the 238.2% Fibonacci level, and was now expected to stabilize between the 161.8% and 200% Fibonacci levels before embarking on its next rally. As of this writing, SHIB was trading at $ 0.00006870 with a market capitalization of $ 37.67 billion.

Shiba Inu 4-hour chart

Shiba Inu continued his massive bull run on the back of a bull pennant breakout two weeks ago. The rally represented another 200% surge, causing SHIB to mark its Fibonacci level of 238.2%, after which profit taking was observed. If SHIB now minimizes its losses in the range above the Fibonacci level of 20-SMA (red) and 161.8%, further upside is expected at the Fibonacci levels of 261.8% and 300%.

However, these targets would be met after a short period of consolidation, considering that 24-hour trading volumes took a massive 40% hit according to CoinMarketCap.

In the event that SHIB weakens below its $ 0.00006169, some short-term uncertainties could create panic among investors. Pullbacks can be felt more deeply towards the 138.2% and 100% Fibonacci levels if most investors lock in their gains.

Reasoning

For the moment, SHIB needed to combat the bearish signals before gathering strength for the next leg forward. For example, the MACD issued a sell signal after recording a bearish crossover, while the -DI line of the directional movement index showed a similar crossover above the + DI line. The RSI was still cooling from the overbought levels and would likely extend its decline towards the middle of the line before reversing.

conclusion

The bulls needed to ensure that the aforementioned sell signals prevent SHIB from closing below the 161.8% Fibonacci level. If so, the bulls may point to another rally once the selling pressure dissipates from the market. Fibonacci levels of 261.8% and 300% would be SHIB’s next targets should its correctional phase come to a conclusion. However, if SHIB closes below $ 0.00006169, a further reduction can be expected.

This is a machine translation of our English version.

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