Technical Analysis of Shiba Inu and Dogecoin: Consolidation in Similar Patterns
Shiba Inu (SHIB/USD) was trading in a consolidation pattern, much like Dogecoin (DOGE/USD), according to analysis by Benzinga. Both cryptocurrencies were experiencing an ‘inside bar pattern’, which occurs when consolidation takes place and is usually followed by a continuation move in the direction of the trend.
An inside bar pattern is considered more valid in larger time frames, such as the 4-hour chart, and is characterised by a minimum of two candlesticks. The first candlestick in the pattern is called the ‘mother bar’ followed by one or more subsequent candles known as ‘inside bars’. A double or triple inside bar can be more powerful than a single inside bar.
If traders want to find bullish opportunities, they should look for inside bar patterns on stocks or cryptocurrencies that are in an uptrend, while bearish traders should look for downtrends. Bulls can take a position during the inside bar prior to the break, while bears have two options of where to take a position to play the break of the pattern. The pattern is invalidated if the stock rises above the highest range of the mother candle.
Shiba Inu’s inside bar pattern leans bearish because the cryptocurrency was trading lower before creating the pattern. If it breaks bearishly from the mother bar later on Thursday or on Friday, bullish traders will want to see the cryptocurrency print a bullish reversal candlestick above $0.00000964 to form a higher low, which would confirm a new uptrend. If it climbs higher over the next few days, Wednesday’s low-of-day at $0.00001017 will mark the higher low. If that happens, traders will want to see it spike up over $0.00001184 to form another higher high.
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