SHIB defends December lows – Will it hold for long?

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• The August price slump was stopped at the December 2022 low.
• Buyers gained market control, but a solid recovery remained elusive.

Shiba Inu [SHIB] bulls came out to defend the December low of $0.00000779 and stopped the August dump. But Bitcoin [BTC] was yet to show signs of recovering August losses, which could complicate SHIB recovery efforts too. 

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What’s next for SHIB?

Source: XRP/USDT on TradingView

SHIB rallied about 40% in the first half of August, setting it to hit April levels of $0.000011. A sharp reversal in the second half of August cleared all the gains.

However, the drop eased at the confluence of the December low ($0.00000779) and the previous resistance zone of $0.00000785 – $0.00000824 (white). 

The RSI wavered below the median 50-mark in the second half of August, demonstrating a dip in buying pressure. In addition, the CMF was below the zero level, denoting massive capital inflows over the same period. 

If BTC records more losses in the next few days/weeks, SHIB could crack the $0.00000785 – $0.00000824 support zone. Southbound, the next supports are $0.00000750 and $0.00000698. 

Conversely, bulls must clear the hurdle and confluence of an invalidated bullish OB $0.00000876 – $0.00000948 (cyan) and May range-high ($0.00000903) to push higher. 

But before that, bulls must also deal with the immediate roadblock and May range-low of $0.00000846.

Buyers gained an edge, but…

Source: Coinalyze

According to Coinalyze, the CVD (Cumulative Volume Delta) has steadily increased since 18 August. It shows that bulls gained a considerable edge after SHIB hit the December low.  

How much are 1,10,100 SHIBs worth today? 

Interestingly, the Open Interest (OI) rates made lower highs between 19 – 22 August, denoting muted demand. But it improved from 23 August only to ease from 25 August. The fluctuating OI thus doesn’t point to a solid rebound on the cards for SHIB. 

Traders should track BTC movement as they might be forced to exit long positions at current support if it cracks.