As the sales in the cryptocurrency market continue, a bear flag has formed on the SHIB and Bitcoin charts. In this article, let’s take a look at what levels this pattern points to.
Shiba Inu, Dogecoin and Bitcoin follow this formation
The Shiba Inu has been down with Bitcoin lately. A number of altcoins, including Dogecoin and Bitcoin, have formed a bear flag pattern on the daily chart. This model is no exception for the Shiba Inu.
The bear flag is formed by a steep drop forming the pole. It then follows a consolidation that brings the stock higher, or a squeeze triangle pattern, between parallel lines and a channel.
This pattern is interpreted by bears and bulls in two different ways:
- “The trend is positive” for bullish investors. Prices may continue to rise in the next channel for a short time. Aggressive traders try to buy at the lower trendline and sell at the higher trendline.
- The bears, on the other hand, would like to watch the breakout of the lower descending trendline of the high volume flag formation for entry. When a coin leaves the bear flag pattern, the measured downward movement is equal to the length of the pole. It should also be added to the highest price within the flag.
The bear flag is invalidated when a coin closes a trading day above the upper trendline of the flag formation or rises more than 50% of the length of the flagpole.
What does this formation say about SHIB?
The Shiba Inu bear flag formation began on June 10. Between this date and June 13, the pole formed, and then the flag formed during the 24-hour trading periods. If the pattern is recognized, the measured movement is about 30%, indicating that the Shiba could drop to $0.00000625.
- The Shiba Inu is trading in a downtrend. The bottom that was last seen on June 8 at $0.000001091 and the LL level formed on June 13 at $0.0000074. If the Shiba Inu breaks out of the bear flag formation, a big drop will be imminent, according to analysts.
- As the SHIB RSI is measured at 30%, it is likely to bounce back in the next few days even if it leaves the bear flag. When a crypto’s RSI reaches or falls below this level, it is oversold. It can also be a buy signal for technical traders waiting for a bounce.
- SHIB is trading below the eight-day and 21-day EMAs. The eight-day EMA is trading below 21 days, both bearish indicators. SHIB is also trading well below the bearish 50-day and 200-day SMA.
- Above are the $0.00001349 and $0.00001734 resistances. Below are supports at $0.00000690 and $0.00000600.
Bitcoin heading to $15,500? What do the charts say?
Bitcoin is down about 7% on Thursday and 2% today after a brief recovery. Bitcoin’s bear flag took shape from June 8 to June 14 with 24-hour timeframes. The measured move is around 33% if the pattern is recognized, which suggests Bitcoin could drop to the $15,500 level. This pattern reveals the following outlook for Bitcoin:
- Bitcoin is trading in a downtrend with HL formed at $23,299 on Tuesday and LL formed at $20,071 on Wednesday. If it breaks below Wednesday’s low in the coming trading sessions, it will likely turn to another religion.
- Finally, a bigger bounce is likely to come as the Bitcoin RSI has hovered between 23% and 25% in the last three 24-hour trading sessions. A crypto is oversold when its RSI drops below 302%. This can also be a buy signal for traders.
- As a result, Bitcoin has resistance above $22,729 and $25.772. Psychological supports are below $20,000 and $19,915.
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