Shiba Inu Looks to Leverage Falling Wedge for Spike to $0.000034

Shiba Inu forms a falling wedge on the daily timeframe, looking to leverage this pattern for a 50% price spike to the $0.000034 region.

Crypto commentator and market analyst Dami DeFi recently called attention to Shiba Inu’s price movements, noting that the ongoing bearish consolidation could be setting up the stage for an imminent pivotal push. Notably, SHIB is looking to resume the late February upswing.

Shiba Inu Forms Falling Wedge 

Recall that Shiba Inu recorded a 380% rise from Feb. 25 to March 5, culminating in the yearly high of $0.00004567. However, the broader market turbulence, coupled with a drop in momentum, led to SHIB relinquishing this high. As a result, a retracement followed that has seen Shiba Inu drop nearly 50% from the March 5 peak.

Dami’s chart suggests that this correction might be healthy for Shiba Inu. Interestingly, SHIB has formed a falling wedge amid the drop. A falling wedge features two converging trendlines sloping downwards. It indicates a potential reversal in the current downtrend, with the possibility of a price breakout to the upside.

$SHIB formed a falling wedge pattern on the 1D time frame

If we breakout, a price pump of 50% + is expected 📈

Memeseason continues. pic.twitter.com/kgA353oLZK

— Dami-Defi (@DamiDefi) May 15, 2024

Shiba Inu Exchange Reserve Drops

With Shiba Inu setting up this pattern on the daily chart, there is an indication that the selling pressure could be slowing down. This is evident in the sustained increase in exchange outflows since May 5. Despite two daily inflows over the past two days, exchanges have witnessed an outflow of $8.88 million worth of SHIB since May 5.

In addition, on-chain data sourced by CryptoQuant shows that Shiba Inu reserve on exchanges (blue line) has dropped drastically since Feb. 29. Notably, data indicates that SHIB exchange reserve currently sits at 151.3 trillion, down from 164.5 trillion on Feb. 29. This confirms that investors have pulled out 13 trillion SHIB from exchanges since Feb. 29.

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Moreover, they have taken off over 5 trillion SHIB from exchanges since March 31 despite the prevalent bearishness. This observable decrease in exchange reserves demonstrates a readiness from market participants to pull their SHIB tokens to self-custodial solutions, possibly for long-term storage. 

A $0.000034 Target

This practice reduces selling pressure and helps bolster price action. On this premise, Dami expects Shiba Inu to record a substantial price gain once it breaks out of the falling wedge. According to the analyst, the immediate target is a 50% surge, which would bring SHIB to $0.00003456.

Shiba Inu currently changes hands at $0.00002304, down 0.17% over the last 24 hours amid a drop in the broader market. SHIB’s derivatives data sends mixed signals, with a 26% drop in volume to $228 million and a meager 1.22% increase in Open Interest to $66.9 million. SHIB’s immediate target is to breach the $0.00002350 to hedge against any steeper declines.