Shiba Inu has a strong demand zone at $0.0297 (price is multiplied by 1000 times current price to reduce decimal places). It has dipped below this zone to support but has seen some demand at that level. However, the price did not form a higher high, nor formed an equal low. This means that there is still no evidence that the downtrend will end or stall.
Source: SHIB/USDT on TradingView
The Fibonacci retracement tool was used to get the SHIB to move from $0.0233 to $0.0885. The 78.6% retracement for this move lies at $0.0372. This level has been a resistance level for the SHIB since December, which is somewhat discouraging for the bulls.
However, the $0.027 area used to be an area where the price faltered for a while before the strong rally in mid-October. At the time of writing, the price dipped slightly below this area before rose back above the level.
The market structure remains bearish as previous highs on the daily chart have yet to be broken. Although the $0.027 area represents a good risk-reward area to buy SHIBs, the trend is still bearish.
Theoretical basis
Source: SHIB/USDT on TradingView
The RSI has been moving below the neutral 50 since mid-November, which shows that the SHIB is in a downtrend. At the time of writing, the RSI is at 47, which means the rally from the support could be coming to an end, which will be confirmed if the RSI turns down over the next few days.
The 20-period SMA in the Bollinger Bands has also acted as resistance for recent prices.
CMF is also below -0.05, showing that capital inflow is moving out of the market significantly.
Inference
Although indicators suggest bearish momentum and market structure is also bearish, the long-term demand zone at $0.027 suggests a good area to buy SHIBs. Certain lows below such demand areas are sometimes seen before a trend reversal and the next resistance to watch lies at $0.0372 and $0.04, with an SMA. 20 days also acts as a resistance level.