An analyst has explained how Shiba Inu could kickstart a new rally to this price target if it can break through the $0.000025 resistance level.
Shiba Inu Is Currently Trying To Break Past The $0.000025 Resistance
In a new post on X, analyst Ali Martinez has discussed a pattern that has been forming in the SHIB price recently. Below is the chart shared by the analyst that depicts the technical analysis (TA) pattern in question.
As is visible in the graph, Shiba Inu has been consolidating inside a bull pennant recently. A pennant is a pattern that consists of three parts: a pole, a triangular consolidation channel, and the succeeding breakout. The ‘pole’ is made up of an initial sharp uptrend or downtrend in the coin’s price. In the context of the current topic, a bull pennant is of relevance, so the pole corresponds to the former type of trend.
The consolidation channel that succeeds the pole (the region that’s actually the ‘pennant’) has the asset move back and forth between two converging trendlines. The upper level of the channel generally provides resistance, while the lower one supports. A break out of either of these lines can imply a continuation of trend in that direction. The likelihood of a breakout taking place naturally goes up the closer the asset gets to the apex of the pattern.
From the chart, it’s apparent that Shiba Inu has been closing in on the converging point of this bull pennant recently, implying that a break could take place soon.
In the scenario that this breakout happens towards the upside, it’s possible that the resulting uptrend would last for a similar length as the pole. If so, SHIB would rise to the $0.000037 mark. Such a rally would imply an increase of more than 53% from the current price of the meme coin. However, Shiba Inu must clear one major obstacle for the run to occur: the $0.000025 level.
Not only does this level roughly coincide with the upper line of the pennant, it also hosts a major on-chain demand zone. As Martinez has pointed out in another X post, around 40,000 addresses purchased a total of 54.6 trillion tokens of the asset around an average price of $0.000025.
Investors who bought their coins around this level would naturally be holding them at a loss right now. As such, it’s possible that when the SHIB price retests this level, some of these holders will decide to sell, fearing that their holdings will dip into loss again in the future.
This potential selling can increase the resistance that Shiba Inu would encounter when trying to break past this mark.
SHIB Price
At the time of writing, Shiba Inu is trading around $0.000024, down almost 4% over the last week.