Shiba Inu Price Shows Early Signs of Reversal with Double Bottom Formation

Summary:
Shiba Inu (SHIB) is displaying signs of potential stabilization as it forms a double bottom pattern at a key support level. With various technical indicators suggesting a decrease in selling pressure, there is a possibility for a bullish turnaround if this support remains intact.

Key Takeaways:

Shiba Inu (SHIB) is forming a double bottom pattern at a significant support level.
The current price action indicates a potential weakening of selling pressure.
Confirmation of a reversal hinges on reclaiming the Point of Control (POC).
Monitoring price behavior around support levels is crucial to avoid downside risks.

Shiba Inu price reversal signs suggest a double bottom at play

Understanding Shiba Inu's Price Structure

Shiba Inu price shows early reversal signs as a double bottom takes shape - 1
SHIBUSDT (12) Chart, Source: TradingView

The ongoing price trends for Shiba Inu indicate a classic scenario where reversal patterns typically appear. The price has retested a critical support level twice and has held firm both times, suggesting the formation of a double bottom. This pattern is widely recognized as a bullish reversal signal, especially when it occurs at significant support zones.

What enhances the bullish outlook for SHIB is the confluence of this support area. The double bottom not only coincides with daily structural support but also aligns with the Value Area Low (VAL), which represents the lower boundary of fair value within the current trading range. A sustained price level at the VAL often means that the market is upholding its value rather than sinking into further losses.

From a market structure perspective, this support zone signifies a potential turning point. Although SHIB remains within a broader corrective pattern, the inability of sellers to push prices lower repeatedly suggests they may be losing strength. While this does not officially confirm a reversal, it does alter the immediate risk profile toward a lesser likelihood of aggressive downward movement.

Steps for Confirmation

The next vital step for confirming a bullish reversal is for SHIB to rotate back towards the Point of Control (POC). The POC represents the price point with the highest trading volume in this range and serves as the market's equilibrium level. If this level is regained, it would indicate that buyers are reasserting control, indicating a transition from a defensive posture to one of acceptance.

Beyond the POC, the Value Area High (VAH) emerges as the primary target for upward movement. Achieving this level would confirm a market shift that moves from the lower range of value to the upper range, a typical behavior in range-based markets. Such a shift would also necessitate SHIB breaking out of its current short-term bearish trend, signaling a significant change in momentum.

However, it is essential to note that confirmation is still pending. Until the price reclaims the Point of Control (POC) with strong upward movement supported by volume, the double bottom remains a developing structure rather than a definitive reversal.

Monitoring Ongoing Developments

Failed double bottoms can lead to quick declines, making it crucial to continuously monitor price movements around support. This is especially important as Shiba Inu progresses with ecosystem developments, including the rollout of a debit card that supports SHIB transactions and rewards.

From a technical and price-action perspective, SHIB is at a pivotal moment. The presence of a double bottom at high-time-frame support presents a favorable risk-reward scenario for bullish traders, although caution is warranted until structural confirmation is achieved.

Future Price Action Expectations

If Shiba Inu can continue to defend its current support level and successfully reclaim the Point of Control, a move towards the Value Area High is likely. Conversely, failing to maintain this support would invalidate the double bottom pattern and expose Shiba Inu to further downside risks.