Shiba Inu (SHIB/USD) saw volatile trading conditions on Sunday, surging as much as 12% at the time and coming within a whisker of the $0.00003800 level, not far from the earlier weekly highs at $0.0003881. The breakout was primarily driven by technical buying after SHIB/USD broke to the north of a short-term downtrend that had been capping the price action since last Tuesday.
SHIB Fails to Break Out of Recent Ranges
The move higher on Sunday was swift, momentum quickly waned and the cryptocurrency is now trading at below $0.00003500 per token again. The SHIB bulls will be discouraged that the cryptocurrency was not able to muster a meaningful test of Tuesday’s high in the $0.00003800s, which now seemingly marks the top of SHIB’s short-term range.
But last week’s low in the $0.00003300 area, which now arguably forms the bottom of SHIB’s short-term range, have and should continue to offer support in the near future. Meanwhile, SHIB bulls may take some solace from the fact that on its return back nuder $0.00003500, SHIB/USD has tested and found support at the downtrend that it broke above on Sunday.
Short-term speculators wanting to trade the break and retest play might thus see current levels as a good entry point. The target for any such short-term long positions would be for a move back to the weekend highs, or even a test of last Tuesday’s highs in the $0.00003800s.
SHIB moves within recent ranges. Source: FXEmpire
SHIB Long-Term Momentum Still Negative
Looking at Shiba Inu over a long-term horizon, the technicals continue to look quite bearish as SHIB/USD continues to head south within the confines of a long-term bearish trend channel. Meanwhile, the cryptocurrency also continues to test/chop key support in the form of the early October highs between $0.00003200 and $0.00003500.
A break below this area of support, as well as recent lows just under the key $0.00003000 level, could open the door to a cascade of selling pressure that could see SHIB/USD lurch back towards its Q3 2021 highs in the $0.0000095 area. That would amount to a more than 70% decline, a real test of the HOLDer’s resolve.
SHIB long-term momentum remains weak. Source: FXEmpire
And Momentum Indicators Not Pointing to Any Imminent Shift
To the SHIB bull’s dispair, momentum indicators don’t yet seem to signal any immediate positive shift in the cryptocurrency’s fortunes. The 14-day Relative Strength Index (RSI) currently sits at around 40.00, well above any level that might indicate SHIB has become oversold (that would be 30 or below).
Long-term Momentum Indicators not saying much. Source: FXEmpire
Meanwhile or the 12-day Exponential Moving Average (EMA), 26EMA MACD indicator doesn’t send any bullish or bearish signals. The 12EMA fell below the 12EMA back at the start of November (proving a good sell signal) and has remained below it ever since.
The gap between the two has been shrinking, but SHIB would need to sustain a rally likely to the north of last week’s ranges for a few days before the 12EMA rose substantially above the 26EMA and signaled a build-up of more lasting bullish momentum.
This article was originally posted on FX Empire