Shiba Inu [SHIB]: Extra gains could be unlikely if this obstacle persists
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- SHIB reached a lower-time frame bearish order block (OB) on the 12-H chart.
- A price rejection at this OB could tip the scales in favor of the bears.
Shiba Inu [SHIB] began the new year on a high note. It rallied from $0.00000792 to $0.00000880, offering over 10% gains. The rally followed Bitcoin’s [BTC] uptrend in the same period.
At press time, SHIB was trading at $0.00000849. The 12-hour chart candlestick showed a shooting star with a long tail wick, indicating the intense opposition SHIB bulls faced from sellers.
The above price rejection occurred in a bearish order of $0.00000855 that existed on the three-hour chart. If this obstacle persists (red zone), SHIB bulls could lose ground to bears, forcing a price drop to this level.
Read Shia Inu’s [SHIB] Price Prediction 2023-24
The $0.00000855 obstacle: Can the bulls overcome it?
Source: SHIB/USDT on TradingView
SHIB dropped below its late December trading range of $0.00000822 – $0.00000836 (yellow lines). But the $0.00000792 kept the downtrend in check, offering bulls strong support to launch a rally.
The rally started on 1 January 2023 but was forced to cool off after hitting the obstacle (red zone). The correction settled on the late December trading range support of $0.00000822.
Nevertheless, another rally, at press time, struggled to overcome the obstacle. If the obstacle persists, SHIB could face another pullback to $0.00000822 in the next day or two. Therefore, if a trend reversal is confirmed, the level can serve as a short-selling target for bears.
The Relative Strength Index (RSI) and Money Flow Index (MFI) faced rejections at 50-mark and 60-mark, respectively. Afterward, the indicators moved upwards, indicating increased buying pressure and undergoing accumulation.
But RSI was also rejected at the 60-mark, leading to a drop in buying pressure. If the trend repeats, it could signal a price reversal.
However, a breakout above the bearish OB at $0.00000873 would give bulls more leverage and invalidate the bearish forecast.
In addition, investors should monitor the Average Directional Movement Index (ADX), which has gradually increased since 4 January. It showed an increasing uptrend trend, but it was below 20 units, indicating a weak momentum.
Shiba Inu saw a decline in trading volume and a bearish sentiment
Source: Santiment
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According to Santiment, SHIB’s daily active addresses and active addresses dropped in the past 24 hours. In addition, the weighted sentiment flipped from positive to negative. This showed a bearish outlook on the asset, as buying pressure declined.
If the trend continued, bears could gain more influence in the market.
