Shiba Inu (SHIB) Breaks Free From Downtrend, Showing Signs of a Technical Breakout

Shiba Inu (CRYPTO: SHIB) broke free from a prolonged downtrend, showing signs of a technical breakout that could lead to a new rally.

After forming a complex WXYXZ correction inside a descending wedge pattern, the meme token created a series of higher lows, which pointed to gathering bullish momentum.

The token was last seen trading at $0.00001373, showing a rise of 2.21% over the last 24 hours. This placed it in a critical zone between the support at $0.00001265 and the resistance at $0.00001516.

Here's a closer look at what could unfold next for Shiba Inu:

What Happened: Technical analysis showed that SHIB completed its corrective pattern on April 7 at $0.00001030. The breakout from the descending structure occurred on March 15, which signaled the end of the long-term corrective phase.

The 4-hour chart showed that after hitting bottom, SHIB experienced a strong rally and was now retesting a zone that coincided with the 0.786 Fibonacci level at $0.000015.

The chart by crypto analyst HYO pointed out that SHIB could be seen in an Elliott Wave impulse structure on the 1-hour chart as it entered the fifth wave of the move.

With wave (iii) completed at $0.00001525 and a pullback to wave (iv) around $0.00001317, this pullback appeared to be healthy and expected within the broader structure. The token was seen beginning the final wave (v), which could have a minimum target of 1.618 Fibonacci extension at $0.00001490 or possibly the 2.0 extension at $0.00001570 if the momentum increased.

For traders, the move through $0.00001418 would be the first confirmation of this continuation pattern. The Relative Strength Index also reset from its previous peak and was around the neutral zone, leaving potential for further upward movement. A key invalidation level was at $0.00001257 and a drop below this point could end the short-term bullish outlook.

Shiba Inu’s daily trading volume had risen by 15.32% to $220.37 million, while its market cap had advanced to $8.09 billion.

This came as the token had shown resilience despite recent challenges. A concerning development involved hackers dumping 150 billion SHIB tokens into the market. Over 1,050 ETH from this exploit was later seen being channeled through TornadoCash, while hackers still held about $25.5 million in crypto assets.

Despite this selling pressure, the market reaction had been surprisingly strong, which might be attributed to the increased token burning activity that had reportedly spiked by over 1,500%, strengthening SHIB’s tokenomics.

In order to maintain the momentum, SHIB needed to break the resistance zone between $0.0000142 and $0.0000145. If it did manage to breakout, then it would validate the bullish trend and potentially send the token towards higher targets.

Some analysts had set ambitious upside targets of $0.00001795 by April 29 and potentially $0.00003039 by May 1, which would represent a 124% gain from current prices.

The 14-day RSI stood at 64.47, which indicated strength but also left room for further growth before entering overbought conditions.

If SHIB failed to break the resistance and the selling resumed then the price may retest the support around $0.0000126. The key battleground remained the zone between the current support and resistance levels.

Shiba Inu continued to maintain an upward structure with higher lows and strong on-chain signals, which were being boosted by Shibarium adoption and a growing holder base. The price was now at a critical juncture. Holding above the $0.00001265 support would be crucial for bulls, while a clean breakout above $0.00001516 would fully confirm the bullish reversal that many traders were anticipating.

As of April 29, SHIB was trading at $0.00001373.