Shiba Inu [SHIB]: Why traders should wait for this before placing long bets

Despite its recent falling wedge breakout, Shiba Inu (SHIB) buyers failed to flip the bearish narrative owing to the coin’s very high correlation with Bitcoin.

Since rebounding from the 61.8% Fibonacci level, the month-long trendline resistance (yellow, dashed) has curbed the potential of buying rallies.

While the current setup exhibited a bearish edge, a close above or below the trendline resistance could influence the coming moves of the dog-themed token. 

At press time, SHIB traded at $0.01075, up by 1.95% over the last day. (For brevity, SHIB prices are multiplied by 1000 from here on).

SHIB Daily Chart

Source: TradingView, SHIB/USD

SHIB found a traversing range between the $0.02-$0.032 for over four months as the bears kept revving up their pressure near the 38.2% Fibonacci level. But the symmetrical triangle setup on the daily chart played out in favor of the sellers due to the alt’s previous downtrend.

After losing the $0.02 baseline, SHIB lost over 60% of its value (from 5 May) and took a plunge toward its seven-month low on 12 May.

As a result, the distance between the south looking 20 EMA (red) and the 50 EMA (cyan) shot up to its record high. Previously SHIB saw such a gap during the bull run towards its ATH in October of last year.

Also, SHIB has marked a significant drop in its volumes while impeding its high volatility phase. Now, the upper and lower Bollinger Bands (BB) could further encourage a relatively tight phase in the coming times. 

A bullish inability to jump above the month-long trendline resistance could extend the current sluggish behavior on the chart. To pave a path toward the $0.013-level, SHIB needed to escape the bonds of its immediate resistance.

Rationale

Source: TradingView, SHIB/USD

After failing to sustain itself above the 33-resistance, the RSI has been hovering near the oversold region for the last three weeks. Unless the bulls topple the 33-resistance, SHIB would have slim chances of a strong revival.

Should the CMF rebound from the -0.06 zone, its recent uptick would confirm a bearish divergence with the price.

Conclusion

With the selling volumes exceeding the buy orders alongside the south looking near-term EMAs, SHIB could continue its sluggish phase near the $0.01045-level.

Any close below this level would position the alt for a further downside toward the lower band of BB.

Besides, the alt shares a staggering 98% 30-day correlation with Bitcoin. Hence, keeping an eye on Bitcoin’s movement with the overall market sentiment could be essential for making a profitable move.