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Shiba Inu (SHIB) broke out of its cup-and-handle pattern on August 14. This makes it more likely that it will make more gains in the weeks to come.
Shiba Inu could soar 50%
A cup-and-handle pattern happens when the price goes down and up in a U-shaped pattern in the first stage, then quickly moves sideways or down in the second stage. Notably, the price trend tends to grow under a common level of resistance.
Usually, cup-and-handle patterns end when the price breaks above the resistance level. This is what happened to SHIB on August 14 after it went up 27% to $0.000016.
Technical analysis says that the breakout target for a cup-and-handle pattern is found by adding the distance between the pattern's lowest point and its resistance line to the breakout point. Because of this, SHIB could go to $0.00002253.
In other words, prices would go up by 50% by September.
A nonsense rally, nonetheless?
Shiba Inu's intraday price increase of 27% on August 14 had no clear cause, except for a metric that showed SHIB's burn rate jumped by 825% in a day. But the SHIB that was burned is only worth a little more than $4,500.
Overall, the Shiba Inu network has burned more than $6.36 million worth of SHIB tokens over the course of its life.
Also, the Shiba Inu rally happened about ten days after Binance said that SHIB support would be added to its payment cards in Europe. By doing this, the cryptocurrency exchange made it more likely that SHIB would find new users in the growing cryptocurrency market in Europe.
We are pleased to announce that @binance has added SHIB to the list of supported tokens for the Binance Card issued in Europe.
— Shib (@Shibtoken) August 5, 2022
You can now pay with SHIB at 60+ million merchants worldwide. Furthermore, get up to 8% cashback and zero annual or FX fees!https://t.co/0Xj7IXPyt0 pic.twitter.com/FqINtnHFWx
Tom Bulkowski, an experienced analyst, says that cup-and-handle setups only meet their profit targets 61% of the time. This could make SHIB's technically bullish bias useless.
So, a failed cup-and-handle breakout and a pullback from the 200-day exponential moving average (the blue wave in the chart below) near $0.00001755 could lead SHIB to look for an initial correction toward $0.00001306, which is 20% lower than the price on August 14.
Shiba Inu's cup-and-handle pattern might not work because the token's daily relative strength index is too high (RSI). Notably, the RSI has gone above 70, which usually means that the market will move sideways or correct itself.
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