Bone ShibaSwap (BONE) has been falling since Aug 30 and could continue its descent until it reaches the $1.20 horizontal support area.
BONE is the governance token of the ShibaSwap ecosystem. It allows holders to vote on proposals, with the weight of their vote being proportional to the amount of their holdings.
It has doubled in price over the past two weeks. The upward movement might have occurred as a result of the anticipation of the new upgrade, Shibarium.
Shibarium is a Layer-2 scaling solution, whose goal is to optimize Shiba Inu’s host chain, Ethereum. The solution is expected to:
- Speed up transactions
- Lower transaction fees
- Contribute to the implementation of the Shiba Inu metaverse.
Shibarium is also rumored to have a built-in burn mechanism, in order to remove coins from circulation and in turn boost their price. While the burning mechanism will be implemented solely with SHIB, the ecosystem will also involve LEASH and BONE tokens, the latter being the utility token of Shibarium.
While there is no set date yet for the release of Shibarium, it is expected to go live in the third quarter of this year.
The price initiated a rapid upward movement on Aug 19. It managed to successfully break out from the $1.20 area on Aug 29. Afterward, it proceeded to reach a high of $2.39 the next day. The high was made just above the 2.61 Fib retracement resistance (white) and created a long upper wick, which is considered a sign of selling pressure.
Furthermore, the daily RSI has generated a very significant bearish divergence (green line), which led to a potential double top pattern.
If the downward movement continues, the closest support area is at $1.20 while the next closest resistance is at $2.66.
SHIB breaks down
SHIB had been trading inside an ascending parallel channel since June 18. The movement inside it led to a high of $0.000018 on Aug 14. This validated both the resistance line of the channel and the $0.0000175 horizontal resistance area (red icon).
However, SHIB has been falling since and broke down from the channel on Aug 26. Currently, SHIB is trading inside the $0.000012 area.
Additionally, the daily RSI has broken down from an ascending support line and has now decreased below 50. So, this grants legitimacy to the breakdown and suggests that lower prices are in store.
If the downward movement continues, the next closest support area would be at $0.00001.
This article was originally published on beincrypto.com