The bear trap that Shiba Inu just pulled off left those who were betting against the meme token reeling. Following a brief dip below the 50-day EMA, SHIB appeared to have a clean technical breakdown after breaking below the $0.000012 support level. It appeared that bears were finally in control, as volume dried up and momentum indicators faded. Many traders probably saw the move as evidence of a trend reversal but that was a costly and premature interpretation.
Rather than continuing to decline, SHIB quickly turned around, recovering the broken support and closing above the 50 EMA in a matter of minutes. Late bears frequently panic out in response to this type of fakeout, and sidelined bulls then aggressively reposition themselves. The subsequent price action supports that scenario exactly: SHIB returned to $0.00001305, indicating a resurgence of confidence and possibly the beginning of a local recovery as volume increased.
This setup's mechanics point to a traditional shakeout, which is a move used to clear out weak hands before the asset returns to its prior trajectory. It is a shady but successful market strategy that is frequently used when sentiment is erratic and liquidity is limited.
Technically, $0.00001339 and $0.00001350 are now resistance points for SHIB. Bullish momentum would probably be rekindled if those were cleared. On the downside, the blue trendline around $0.000012 and $0.00001256 serve as important supports. For as long as those levels persist, bears will remain defensive.
Bitcoin ready for volatility
A Bitcoin volatility squeeze is about to begin. Following an intense surge that saw Bitcoin reach almost $119,000 the asset has entered a phase of sideways consolidation with progressively smaller daily ranges. At $118,900, the price is currently embracing the upper resistance band, and a distinct horizontal level is forming just below the local high.
Under a flat top, the 21-day EMA's support is neatly catching each dip and forming a textbook ascending support structure that functions as a pressure cooker. In the crypto world, this type of compression is rarely permanent, particularly for an asset like Bitcoin.
This type of low volatility has historically preceded explosive breakouts or breakdowns. The current position of Bitcoin, which includes a robust uptrend, a bullish moving average alignment and a proper volume holding support, suggests that the odds are slightly in favor of an upside breakout.
But it is risky for anyone to assume anything here. An immediate surge to new highs might be triggered by a clear close above the $119,000-$120,000 resistance zone. However, if the rising trendline is broken or a breakout attempt fails, Bitcoin may return to test deeper support at $116,200 or even the 50 EMA at $111,200. It is likely that the next leg will be determined by an abrupt increase in buy or sell volume.
XRP stabilizing
Following weeks of volatile movement and mid-range corrections, XRP might finally be stabilizing and, more significantly, it might have a chance to recover steadily. The 26-day EMA, a dynamic support level that frequently serves as a launching pad for trend continuation during bullish periods, has just seen a clean bounce from the asset. Following a steady corrective slide from the most recent local top near $3.70, there was a bounce around $3.00.
A small but bullish signal volume has significantly dropped during the pullback, despite a few erratic daily candles. This suggests that there is not any aggressive selling pressure driving the correction. In other words, traders are waiting rather than panicking. The bounce off the 26 EMA is especially noteworthy. This moving average has not been tested by XRP since the huge rally that propelled it above all significant moving averages in the middle of July.
A longer-term reversal structure may be about to begin if the price holds this level and continues to mark higher lows in the days ahead. This could be a continuation of the initial bullish impulse. In order for this configuration to develop, XRP must progressively recover the local high structure without causing another spike in volatility. The initial short-term obstacle lies in the $3.30-$3.40 range.
A break above that might signal that bulls are once again in charge and pave the way for a retest at $3.70 and higher. This bounce still needs to be verified, of course. Deeper support zones around $2.60 or even $2.30 may be revisited by the market if XRP is unable to hold above the 26 EMA or exhibits poor follow-through on the attempted recovery. But the setup is in place for the time being.
