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Shiba Inu (SHIB) on Verge of Death Cross: Possible Scenarios
The cryptocurrency market is experiencing a significant downturn, with many tokens witnessing a substantial decline in value. SHIB, the popular meme token, has also been impacted by this bearish trend, and its price is currently hovering around $0.00001875 per token.
As the market continues to fluctuate, traders and investors are left wondering what could happen next. One potential scenario that needs attention is the possibility of a death cross forming on SHIB’s charts.
What Is A Death Cross?
A death cross occurs when the 50-day simple moving average (SMA) falls below the 200-day SMA. This technical indicator has proven to be quite accurate in predicting downturns or at least significant pauses in an uptrend.
If this scenario plays out, it could mean that SHIB’s current downtrend will continue for a while longer, potentially leading to further losses.
Short-Term and Long-Term Scenarios
The chart below shows the recent price action of SHIB:
As the price has failed to break through the $0.00002125 resistance level and has been consistently trading within this range ($0.00001875 – $0.00002125), it is essential to consider short-term and long-term possible scenarios.
Scenario 1: Death Cross Formed, Further Losses Imminent
If the death cross occurs on SHIB’s charts, there might be a higher chance that the price will drop further down to the next significant support level around $0.0000145.
In this scenario, investors should prepare for potential losses in their positions and consider taking profits or reducing exposure accordingly.
Scenario 2: Intraday Rebound
Another possibility is that SHIB could experience an intraday rebound as it approaches its immediate support at $0.00001875. If the price does not get back below this level, there may be a higher likelihood of further short-term gains.
However, considering the failure to break above the $0.00002125 resistance and the overall bearish trend in the cryptocurrency market, the potential for significant gains in the short term is limited.
Long-Term Perspective
It’s crucial to consider the bigger picture, focusing on SHIB’s long-term trajectory rather than short-term movements.
If the recent recovery was indeed a false breakout, this could be interpreted as a sign of weakness and may suggest that we are not yet out of the woods for the meme token.
Source: u.today
