Shiba Inu could surge 50%
A cup handle occurs when the price falls and rises in a U-shaped trajectory in the first phase, and then moves quickly sideways or down in the second phase. Notably, the price trend is developing under a common resistance level.
Typically, the cup-and-handle pattern resolves after price breaks resistance; SHIB did the same on August 14 after a 27% rise to $0.000016, as shown below.
According to technical analysis rules, the cup-and-handle breakout target is determined by measuring the distance between the pattern’s lowest point and the resistance line and adding it to the breakout point. Therefore, SHIB may head towards $0.00002253.
In other words, prices are up 50% by September.
However, a meaningless rally?
Fundamentally, the Shiba Inu gained 27% intraday on Aug. 14 with no apparent catalyst other than one indicator show SHIB’s burn rate soared 825% in one day. But the burned SHIB was worth just over $4,500.
Overall, however, the Shiba Inu network has burned over $6.36 million worth of SHIB tokens over its lifetime.
Also, the Shiba Inu rally comes nearly ten days after Binance. announcement Add SHIB support for their payment cards issued in Europe. By doing so, the cryptocurrency exchange increases the potential of SHIB to find new users in the nascent European cryptocurrency space.
We are pleased to announce @binance SHIB has been added to the list of supported tokens for the European issued Binance Card.
— Shib (@Shibtoken) August 5, 2022
Weak fundamentals could offset the SHIB’s technically bullish bias, however, given that the cup and handle setup has only a 61% success rate in achieving its profit targets, according to Senior Analyst Tom Bulkowski.
Therefore, if the cup handle breakout fails – also a retracement from the 200-day exponential moving average (200-day EMA; blue wave in the chart below) to around $0.00001755 – it could see SHIB see an initial correction to $0.00001306, A 20% drop from today’s price.
The cup-and-handle setup for Shiba Inu may fail due to the overbought daily Relative Strength Index (RSI) of the coin. Notably, the RSI has broken above 70, which usually leads to a period of sideways consolidation or correction.
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