Shiba Inu’s technical setup points to more losses after escaping from a consolidation zone. SHIB flashed red on Friday as bears focused on undoing Thursday’s gains. With 3.4% declines on the day, the meme coin started at 23% more losses to $0.0000092.
Shiba Inu climbed 2.35% on the first day of March, a rally with a $200 million 24-hour trading volume, indicating increasing investor interest in the token. This could also be attributed to the launch of the network’s Layer 2 blockchain Shibarium later this month.
Crypto experts expect Shibarium’s launch will fuel the SHIB price higher. This is not only because it is expected to boost usage of the Shiba Inu network but also because it will regularly introduce the burning of SHIB tokens.
SHIB token burn will come in transaction fees, with a portion of the $BONE tokens collected as fees being converted into SHIB. These will then be sent to unusable wallets. Because of this, if Shibarium experiences a high level of adoption and usage, a significant quantity of SHIB could be burned, increasing the value of the dog-themed coin.
SHIB Consolidates In A Symmetrical Triangle
Shiba Inu’s price action has led to the appearance of a symmetrical triangle in the daily chart (below). If the technical setup works correctly, traders could witness a 23.4% downward spiral rally for the “DOGE killer.”
The Relative Strength Index (RSI) was moving down below the midline. The price strength at 43 suggested that the sellers were regaining control, justifying the increasing price volatility to the downside.
The SHIB price was trading below the triangle’s support line at press time. If bears produce a daily candlestick below $0.00001231, embraced by both the lower trendline of the triangle and the 50-day Simple Moving Average (SMA), a 23.4% drop would occur to $0.0000092.
SHIB/USD Daily Chart
The moving averages flattened out, suggesting that yesterday’s buying momentum had run out of steam. The drop below the 50-day SMA during the early Asian trading session on Thursday was still in play, implying that SHIB faced stiff resistance at $0.00001231. This suggests that the path with the least resistance is downwards, justifying the pessimistic outlook.
On the upside, a daily candlestick close above the triangle’s support line at $0.00001231 could see the buyers push the price above the triangle’s upper trendline at $0.0000126. Such a move would bring the bullish scenario into the picture. A 34.31% ascent could occur, taking Shiba Inu to $0.00001614, levels last seen in August 2022.