Disclaimer: The results of the following analysis are the sole opinions of the writer and should not be considered investment advice.
As anticipated in the previous article, Shiba Inu [SHIB] It broke the $0.01217 mark after forming a bullish rectangle bottom setup. (For short, SHIB prices are multiplied by 1000 from now on.)
While the sellers showed short-term resistance at the $0.017 mark, the buyers would be striving for continued growth amid the recent bullish engulfing candle.
On the other hand, sellers could aim to inflict a pullback towards the 20 EMA (red) before a likely bounce. At press time, SHIB was trading at $0.01477, down 6.8% in the last 24 hours.
SHIB daily chart
For more than two months, SHIB buyers faced recovery barriers in the $0.01217 region. As a result, this choppy move led to a sideways run on the daily chart.
Meanwhile, the bulls continued to add to their underlying pressure reflected in the form of higher lows in recent weeks.
Consequently, SHIB formed an ascending triangle on the daily chart and reflected a visible bullish edge.
Furthermore, the north-facing 20 EMA (red) and 50 EMA (cyan) assumed immediate support after their recent bullish crossover. The eventual breakout of the August 14 candle implied a massive spike in buying volumes.
Due to the bullish engulfing candlestick, an immediate rally above the $0.0152 mark may give way to a prolonged rally.
In this case, SHIB could see a rally towards the $0.017-$0.02 range. Failure to find a close above this mark would only cause a slow phase near the EMAs.
After quickly breaking through the 70 mark, the overbought Relative Strength Index (RSI) saw a slight pullback in recent days. Buyers should strive to hold a spot above the 59 support level to increase the chances of a continued rally.
Furthermore, the bottom troughs of the Accumulation/Distribution indicator were quite flat while diverging upwards with price. A sustained close below its immediate support could delay near-term recovery prospects.
Given the bullish engulfing candlestick breakout on high volumes coupled with the 20/50 EMA looking north, the buyers would strive to maintain their advantage. Any reversal towards the 20 EMA could hint at a plausible dull phase. The objectives would remain the same as discussed.
But the alt shares a 59% 30-day correlation with Bitcoin. Therefore, keeping an eye on the movement of Bitcoin with the general market sentiment could be essential to identify any bullish invalidation.