Shiba Inu Continues Consolidation In Oversold Territory As Burn Rate Increases: A Technical Analysis

Shiba Inu SHIB/USD was sliding over 1% lower during Tuesday’s 24-hour trading session, moving inversely to Dogecoin DOGE/USD, which was rising slightly. Shiba Inu’s move lower comes amid an increase in the rate at which the tokens are being burned to decrease the overall supply.

The token, dubbed the “Dogecoin Killer” has been trading mostly sideways on decreasing volume since May 8, and on Tuesday the crypto was trading in an inside bar pattern, which indicates consolidation.

An inside bar pattern has more validity on larger time frames (four-hour charts or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar, and each is called an "inside bar."

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

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The Shiba Inu Chart: Shiba Inu’s inside bar is neutral because the stock is trading in a horizontal pattern, but traders can watch for the crypto to break up or down from Monday’s mother bar on higher-than-average volume to gauge at least short-term direction on small timeframes. If the crypto breaks down from the pattern, bullish traders want to see Shiba Inu bounce up from the $0.00000856 mark, which has been acting as solid support.

• If Shiba Inu breaks up from the mother bar, the crypto is likely to regain support at the eight-day exponential moving average, which would give bullish traders more confidence going forward. A bounce is likely to happen in the near term because Shiba Inu’s relative strength index has been measuring in at oversold since May 6.
• Bearish traders want to see big bearish volume come in and knock Shiba Inu under the strong support level, which would confirm a new downtrend.
• Shiba Inu has resistance above at $0.0000877 and $0.00000975 and support below at $0.00000856 and $0.00000738.

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