Shiba Inu (SHIB) broke out of its prevailing “cup-and-handle” pattern on August 14, increasing the chances of securing further gains in the coming weeks.
Shiba Inu can rise 50%
A cup-and-handle appears when price falls and rises in a U-shaped path in the first phase, followed by a rapid sideways or downward movement in the second. In particular, the price trend develops below a common resistance level.
Usually, cup-and-handle patterns are resolved after the price breaks above the resistance level; SHIB did the same on August 14th after rising 27% to $0.000016, as shown below.
According to the rule of technical analysis, a cup-and-handle breakout target is determined by measuring the distance between the lowest point of the pattern and the resistance line and adding it to the breakout point. As a result, SHIB can go towards $0.00002253.
In other words, a price increase of 50% by September.
A silly rally, though?
Initially, Shiba Inu’s 27% intraday price rally on August 14 had no apparent catalysts except for a calculation showing that SHIB’s burn rate rose 825% in one day. But the amount of burned SHIB is worth just over $4,500.
In all, however, the Shiba Inu network has burned over $6.36 million worth of SHIB tokens over its lifetime.
In addition, the Shiba Inu rally came almost ten days after Binance’s announcement to add SHIB support to its payment cards issued in Europe. By doing so, the crypto exchange increased SHIB’s potential to find new users in the emerging European cryptocurrency space.
We are happy to announce that @binance has added SHIB to the list of supported tokens for the Binance card issued in Europe.
You can now pay with SHIB at over 60 million retailers worldwide. Plus, you get up to 8% cashback and zero annual or foreign exchange fees! https://t.co/0Xj7IXPyt0 pic.twitter.com/FqINtnHFWx
— Shib (@Shibtoken) 5 August 2022
However, weak fundamentals could offset SHIB’s technical bullish bias, given that cup-and-handle setups have only a 61% success rate in hitting their profit targets, according to veteran analyst Tom Bulkowski.
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Therefore, a failed cup-and-handle breakout – even on a pullback from the 200-day exponential moving average (200-day EMA; the blue wave in the chart below) near $0.00001755 – could see SHIB see an initial correction against $0.00001306, down 20% from today’s rate.
Shiba Inu’s cup-and-handle setup may weaken due to the token’s overbought daily relative strength index (RSI). In particular, the RSI has crossed above 70, which usually results in a period of sideways consolidation or correction.
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