Shiba Inu’s near-term trajectory could depend on this level

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Shiba Inu was on cooldown mode after clocking in gains of over 300% on the back of a buying frenzy. After earning a quick buck, investors seemed to be leaving its market quickly at press time. Naturally, the alt took a hit on its chart and registered a near 42% decline in value after touching record levels.

Bearish signals were also creeping in across the market. A crossover between the 20-SMA and 50-SMA played in favor of the bears, with the same fueling weak readings on the hourly RSI.

From here, SHIB’s near-term trajectory could depend on how buyers and sellers parlay at $0.00002047.

Shiba Inu Hourly Chart

Source: SHIBA/USD, TradingView

Going forward, the focus will be on the newly-discovered support line of $0.00002047. An unfavorable crossover between the hourly 50-SMA (yellow) and 20-SMA (red) can be expected to generate some more selling pressure and another attack at this support seemed imminent.

Meanwhile, buyers can put up a fight at $0.00002047 in order to preserve SHIB within its developing value area. A move above SHIB’s near-term resistance of $0.00002364 would stem the bleeding and offer bulls some breathing space.

However, an extended sell-off would be possible in case bears penetrate this immediate support. The next defenses for SHIB rested at $0.00001750 and $0.00001562, respectively.

Reasoning

Now, based on the MACD and Awesome Oscillator, a breakout below $0.00002047 is not a guarantee. In fact, downwards pressure seemed to be receding as the MACD approached a bullish crossover while the Awesome Oscillator eyed a comeback above the half-line.

On the other hand, the Relative Strength Index opposed such arguments. The index seemed unable to climb above 45 over the past few sessions – A reading which suggested that buyers were being outplayed.

Conclusion 

SHIB needs to flash stronger signals to attract bullish traders back to the market. The combination of a weak RSI and a crossover between the near-term SMAs can be expected to weigh on SHIB. Another 20%-24% drawdown will be on the table if bears slice below $0.00002047.

However, buyers can take heart from the hourly MACD and Awesome Oscillator. A lot of market uncertainties would be alleviated if buyers are able to keep SHIB above this aforementioned support.