- Dogecoin and Shiba Inu lead market recovery on Tuesday.
- Both the tokens fell drastically on May 9 before registering massive gains on May 10.
NEW DELHI (CoinChapter.com) — Top ‘meme’ tokens Dogecoin (DOGE) and Shiba Inu (SHIB) prices recovered after falling 18% and 24% against the U.S. dollar this Monday, primarily due to similar crashes witnessed elsewhere in the cryptocurrency market.
DOGE’s price rebounded by more than 19% between intraday low ($0.099) and high ($0.118) levels on May 10. Similarly, SHIB also rose 32.6% to reach $0.00001795. The recovery indicates bulls are actively buying the dips for the two tokens.
In addition, Dogecoin has painted a bullish pattern which might see traders buying the token in anticipation of the gains if the pattern holds. On the other hand, Shiba Inu introduced a burning mechanism for its token, among other updates to its ecosystem, adding bullish cues for SHIB.
Dogecoin Paints Bullish Technical Pattern
Dogecoin prices are moving in a bullish pattern called the falling wedge. In detail, the pattern forms when a token’s price bounces between two downward slopings, converging trendlines. The upside target for the breakout is equal to the maximum distance between the falling wedge’s upper and lower trendlines.
DOGE has a price target of nearly $0.356, a jump of nearly 217% from the current price level. However, Dogecoin prices still need to move above $0.2 resistance before enjoying the bullish cues from its falling wedge breakout.
DOGE Price Chart
DOGE prices fell by 27.5% between May 5’s high ($0.138) and May 9’s low ($0.1). However, the meme token’s prices revived on Tuesday, jumping 17% intraday before prices corrected.
Furthermore, the relative strength index for Dogecoin rebounded from the oversold boundary on May 10. An oversold RSI indicates a bullish trend reversal is on the cards. With DOGE prices near oversold levels, investors who rely on RSI moved in to buy the dip and trigger a rally.
DOGE RSI is currently neutral, with a value of 39.01 on the daily charts.
If the uptrend continues, Dogecoin prices might flip immediate resistance near $0.117 before challenging DOGE 20-day moving average (20-day MA, red wave) resistance near $0.131.
Finally, Dogecoin prices would need to move above their 100-day MA (purple wave) and 50-day MA (yellow wave) before targeting resistance near $0.148, a price level that has rebuffed DOGE uptrends since Feb 17 this year.
Conversely, if the uptrend fails, DOGE prices could fall to immediate support near $0.106, a price level Dogecoin has breached only once since Apr 2021. However, a marketwide sell-off could push prices to a key psychological support level near $0.1.
Shiba Inu Breaks Below Descending Triangle Pattern
Dogecoin competitor Shiba Inu’s price action led to the SHIB token forming a bearish technical pattern called the descending triangle. In detail, a descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern.
The height of the triangle’s thickest section determines the price target in a descending triangle setup.
SHIB price risks falling to $0.00000619, a more than 65% drop from current price levels. Traders often look to high trading volumes to confirm a breakdown of the pattern. For example, the memecoin broke below the pattern on May 7.
SHIB Price Chart
Shiba Inu prices reversed their downtrend on May 10 after Monday saw SHIB registering its largest single-day loss since the May 19, 2021 crash. Furthermore, SHIB’s relative strength index moved back into the neutral region (35.38 at writing) after clocking at 22.87 on Monday, its lowest since Jun 13, 2021.
Moreover, the SHIB token also broke below the lower trendline of the Bollinger Bands indicator.
In detail, Bollinger bands consist of a simple moving average (middle band) and an upper and lower band. The two bands are standard deviations from the middle band. Therefore, when an asset’s prices break below the lower bands, it denotes an oversold condition.
SHIB’s price action followed the book perfectly, as the memecoin jumped nearly 29% between intraday low ($0.00001354) and high ($0.00001741) levels on May 10. If the uptrend continues, SHIB prices would need to break above immediate resistance near $0.000018.
Moreover, a sustained uptrend could see SHIB prices rise to $0.0000206, near the memecoin’s 20-day moving average (20-day MA, red wave). A move above 20-day MA might see SHIB token challenge a 50-day MA (yellow wave) and 100-day MA (purple wave) resistance confluence near $0.0000237.
Conversely, a failed uptrend might see Shiba Inu fall to support near $0.0000151. A sustained downtrend could result in SHIB prices testing support near $0.000135. Finally, a market-wide sell-off could push SHIB prices to support near $0.000012 before recovering.
At the time of writing, SHIB was trading at $0.0000173, up 24.27% on the day, and DOGE was trading at $0.1163, up 14% on the day.