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Shiba Inu (SHIB) Eyes Death Cross: 2 Potential Scenarios Ahead
The cryptocurrency market has been in a state of turmoil in recent weeks, with many assets experiencing significant losses. Amidst the chaos, Shiba Inu (SHIB), once touted as the next big thing, is now facing an ominous warning sign – the formation of a death cross.
For those unfamiliar with technical analysis, a death cross occurs when the shorter-term 50-day moving average crosses below the longer-term 200-day moving average. This bearish signal typically indicates that the trend has reversed and a prolonged decline may ensue.
In Shiba Inu’s case, the asset is currently trading at a critical juncture as the short-term MA is hovering just above the long-term MA. A close below this point would trigger the death cross warning, which could lead to further losses.
However, there are two potential scenarios that may play out in the coming days:
Scenario 1: SHIB Bounces Off the Death Cross
While it’s possible that Shiba Inu could plummet immediately after the death cross forms, there’s also a chance that the asset will rebound and test resistance levels once again. This would be particularly true if investors become more risk-averse due to the bearish signal.
In such an event, SHIB may attempt to recover some of its lost ground, potentially reaching key resistance areas around $0.0000205-$0.000025. While this outcome is not guaranteed, it’s a possible scenario that investors should consider.
Scenario 2: SHIB Continues Downward Trend
On the other hand, if Shiba Inu fails to bounce off the death cross, it may continue its downward trajectory. This would be particularly concerning as it could signal a broader bearish trend for the asset.
In this case, it’s difficult to predict where the bottom of this potential downtrend might be. However, investors should prepare for potentially significant losses and consider adjusting their positions accordingly.
To mitigate risk and ensure profitability in any market condition, investors are advised to maintain stop-loss orders and limit their exposure to SHIB.
Source: u.today
