Shiba Inu Extended Bull Flag Calls for Imminent Breakout
Shiba Inu (SHIBA) has been consolidating for the past two weeks with no clear direction. However, the price action is developing a bullish flag formation which calls for a move higher if confirmed.
Bullish Flag Pattern
In a bull flag scenario, we have a period of consolidation that usually calls for the continuation of the price movement prior to the flag formation.
The flag consolidation was established roughly between the $0.0000121 resistance level and $0.0000095 support level.
The bullish flag formation is only confirmed once the SHIBA price breaks above the upper horizontal resistance level. Usually, the subsequent rally is the same price length as the flagpole. If we project to the upside the same price movement, SHIBA can go as high as $0.00002.
This level is also significant because it aligns with the 200-day Simple Moving Average (SMA), which the price might want to retest.
What is a Bull Flag?
A bull flag is a technical pattern that can be found on a price chart of an asset. It resembles a flag on a pole and is considered a continuation pattern, meaning that it typically occurs during an uptrend and signals that the trend will continue.
The breakout from the bull flag pattern often happens very quickly, which is why many traders watch for this pattern.
RSI Oscillator
The Relative Strength Index (RSI) also appears to hold above the 50 mid-level signaling bullish momentum.
At the same time, the Chaikin Money Flow (CMF), which can help us monitor the accumulation-distribution over a set period of time, is above the zero level – meaning there is more buying pressure.
What is a RSI Oscillator?
An RSI oscillator is a technical indicator that measures the momentum of a stock price.
It is used to identify potential turning points in the market. The indicator is based on the difference between the average price of a stock over a certain period of time and the current price.
If the current price is higher than the average price, it indicates that the stock is in an uptrend. If the current price is lower than the average price, it indicates that the stock is in a downtrend.
Looking forward: While the bull flag pattern is not yet confirmed, a break to the downside can invalidate the pattern, and the bears may try to challenge the current swing low around the $0.000007 level.
