Shiba Inu Follows Dogecoin Into A Bounce: How High Can The DOGE Killer Go?

Shiba Inu SHIB/USD fell more than 4% after opening the 24-hour trading session on Sunday evening, but by press time Monday, the crypto had erased most of its losses and was trading up over 1% higher in tandem with Dogecoin DOGE/USD, which also bounced up about 4% from its low-of-day.

The bounce higher has, so far, not been enough to negate the downtrend Shiba Inu entered into on April 13, after soaring up more than 35% the day prior to reach a high-of-day at the $0.00003 level.

A downtrend occurs when a stock consistently makes a series of lower lows and lower highs on the chart.

The lower lows indicate the bears are in control while the intermittent lower highs indicate consolidation periods. Traders can use moving averages to help identify an uptrend with descending lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term downtrend and descending longer-term moving averages (such as the 200-day simple moving average) indicating a long-term downtrend.

A stock often signals when the lower low is in by printing a reversal candlestick such as a doji, bullish engulfing or hammer candlestick. Likewise, the lower high could be signaled when a doji, gravestone or dragonfly candlestick is printed. Moreover, the lower lows and lower highs often take place at resistance and support levels.

In a downtrend the “trend is your friend” until it’s not and in a downtrend, there are ways for both bullish and bearish traders to participate in the stock:

  • Bearish traders who are already holding a position in a stock can feel confident the downtrend will continue unless the stock makes a higher high. Traders looking to take a position in a stock trading in a downtrend can usually find the safest entry on the lower high.
  • Bullish traders can enter the trade on the lower low and exit on the lower high. These traders can also enter when the downtrend breaks and the stock makes a higher high indicating a reversal into an uptrend may be in the cards.

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The Shiba Inu Chart: Shiba Inu’s most recent lower high was printed on April 15 at $0.00002624 and the most recent confirmed lower low was formed at the $0.00002527 level the day prior. If the crypto closes the trading day near its high-of-day price, it will print a hammer candlestick, which could indicate higher prices will come on during the next 24-hour trading session and that would confirm Shiba Inu printed another lower low on Monday.

  • If the crypto is able to rise up over the $0.00002640 level on Tuesday, the downtrend will be negated and Shiba Inu may begin to trade in an uptrend. If the crypto is not able to surpass that level on the next push up and print a bearish reversal candlestick under the area, it will provide a solid entry for traders who wish to enter into short positions.
  • On Monday, Shiba Inu was rejecting the eight-day and 21-day exponential moving averages (EMAs) as resistance. If the crypto is able to push up above both EMAs over the coming days, they may act as support, which would give bullish traders more confidence going forward.
  • Shiba Inu has resistance above at $0.00002640 and $0.00002958 and support below at $0.00002333 and $0.00002012.

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