Will Shiba Inu Fly 30% On A Break Of This Pattern? Here's A Technical Analysis

Shiba Inu SHIB/USD was trading near flat during Tuesday’s 24-hour trading session, in continued consolidation after soaring 30% between Feb. 1 and Saturday.

Over the last three days, Shiba Inu’s volume has been decreasing, which confirms consolidation. The crypto’s consolidation may be taking place within a bull flag pattern.

The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines or into a tightening triangle pattern.

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For bearish traders, the "trend is your friend" (until it's not) and the stock may continue downwards within the following channel for a short period of time. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.

Bullish traders will want to watch for a break up from the upper descending trendline of the flag formation, on high volume, for an entry. When a stock breaks up from a bull flag pattern, the measured move higher is equal to the length of the pole and should be added to the lowest price within the flag.

A bull flag is negated when a stock closes a trading day below the lower trendline of the flag pattern or if the flag falls more than 50% down the length of the pole.

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The Shiba Inu Chart: Shiba Inu’s bull flag pattern began to form on Feb. 1, with the pole created between that date and Saturday and the flag forming over the trading days that have followed. The measured move of the pattern is 30%, which suggests Shiba Inu could surge up toward $0.00001800, although if that happens it will come with pullbacks along the way.

• Bullish traders may be concerned with the upper wicks on the candlesticks within the flag pattern, which is a valid concern. If Shiba Inu falls under the eight-day exponential moving average the bull flag will be negated and traders and investors will need to watch for a subsequent pattern to print.
• Shiba Inu is trading within a fairly consistent uptrend, with the most recent higher low formed on Feb. 7 at $0.00001120 and the most recent higher high printed at the $0.00001590 mark on Saturday. If Shiba Inu breaks up from the bull flag pattern over the next few days, Tuesday’s low-of-day may serve as the next higher low within the pattern.
• Continued consolidation would be healthy for Shiba Inu before a potential move higher because the crypto’s relative strength index (RSI) has been measuring in above 70% since Feb. 2. When a stock or crypto’s RSI reaches or exceeds that level, it becomes overbought, which can be a sell signal for technical traders.
• Shiba Inu has resistance above at $0.00001499 and $0.00001734 and support below at $0.00001349 and $0.00001259.

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