Shiba Inu (SHIB) has experienced a persistent downtrend since May 4, 2024, following a 27.16% loss in April—the highest since the Terra collapse in May 2022. However, recent developments indicate that SHIB might be poised for a significant price recovery.
Shiba Inu Bollinger Bands Indicate Potential Reversal
After testing the lower Bollinger Band following a sharp decline to $0.00002156, SHIB’s downtrend has shown signs of easing. This retest suggests a potential breakout that could end the prolonged bearish trend.
Traders often use Bollinger Bands to identify overbought or oversold conditions, which can signal impending trend reversals. When an asset’s price falls to or below the lower band during a downtrend, it typically indicates an oversold condition and a potential weakening of the downtrend.
In Shiba Inu’s case, the Bollinger Bands are narrowing. This indicates reduced volatility and an upcoming price movement. According to Santiment data, SHIB’s volatility dropped to 0.003097 on May 12, the lowest level in three months.
The last similar volatility slump occurred on February 25, preceding a 370% price surge to $0.000045 on March 5. Although volatility has seen a slight uptick recently, it remains below the daily average. At the time of writing, Shiba Inu is changing hands for $0.00002481.
Symmetrical Triangle Breakout Implication
Market analysts have also identified a symmetrical triangle pattern on the daily chart, with Shiba Inu breaking above the upper trendline. This breakout further suggests a potential significant price upswing.
Given these bullish signals, some analysts predict Shiba Inu could reach $0.00005. Market analyst SHIB Knight is more optimistic, forecasting that SHIB could hit $0.00006 upon a trend reversal, which would represent a 147% increase from its current value.
As Shiba Inu rallies, investors and traders are closely monitoring these indicators for signs of a sustained recovery and potential price surge. At the moment, SHIB is maintaining a tighter distribution by burning a total of 29,484,000 SHIB on May 14, a burn rate of 127.57%.
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