On Aug. 14, Shiba Inu (SHIB) broke out of its prevailing "cup-and-handle" pattern, boosting its prospects for future gains.
During the first stage of a cup-and-handle pattern, the price falls and rises in a U-shape, followed by a sideways or downward move. Under a common resistance level, the price trend develops.
As shown in the chart below, cup-and-handle patterns resolve after the price breaks above the resistance level; SHIB did the same on Aug. 14 after rising 27% to $0.000016.
A cup-and-handle breakout target is determined by adding the distance between the pattern's lowest point and resistance line to the breakout point. Thus, SHIB could reach $0.00002253.
Fundamentally, Shiba Inu's 27% intraday price rally on Aug. 14 had no visible catalysts other than its burn rate surging by 825% in a day. However, the amount of burned SHIB is worth only over $4,500.
Despite this, the Shiba Inu network as a whole has burned over $6.36 million worth of SHIB tokens in the course of its existence.
Shiba Inu rallies came almost ten days after Binance announced it would support SHIB Inu on its European payment cards.
By doing so, the crypto exchange increased SHIB's potential for finding new users in the emerging European cryptocurrency market.
Tom Bulkowski, a veteran analyst, says cup-and-handle setups have only a 61% success rate in meeting their profit targets, which could offset SHIB's technically bullish bias.
Therefore, a failed cup-and-handle breakout-also on a pullback from $0.00001755-could set the stage for an initial correction toward $0.00001306, down 20% from today's price.