Shiba Inu's Recovery: Is a Sustained Rally on the Horizon?
Dramatic surge in Shiba Inu token burns - Transient phenomenon or lasting trend?
The canine-themed cryptocurrency, Shiba Inu (SHIB), has seen a massive surge in its 24-hour token burn rate, rekindling the fire under the SHIB community. Even as the price languishes at $0.00001309, a drop of 3.95% over 24 hours, the underlying on-chain indicators are pointing to a promising revival.
Fresh Engagement and Revived Interest
In the last seven days, the number of new addresses have increased by 22.10% and active addresses by 23.07%. Even the zero-balance addresses, often associated with inactive or reset wallets, spiked by a whopping 31.41%. This dynamic pattern suggests both new inflows and activity from dormant users, echoing the old adage, "A rising tide lifts all boats."
Historically, such increases in user activity have served as harbingers of price volatility. However, the sustainability of an uptrend hinges on broader market participation from whales, institutional investors, and the wider public.
Potential Price Breakout
Technically, SHIB appears to be completing a bullish cup and handle formation. The neckline resistance stands firm at $0.00001411. Breaking above this level could catapult SHIB toward the projected target at $0.00001709. But, losing the critical support zone at $0.00001051 could invalidate the pattern and potentially initiate a downward spiral.
Bullish or Overextended: A Mixed Picture
While the on-chain metrics paint a bullish picture, exchange reserves have declined slightly by 0.12% over the past week, implying reduced selling pressure, often a sign of accumulation by long-term holders. However, the 24-hour Netflow plummeted by 157.97%, indicating a rush of traders depositing SHIB, frequently a signal that they plan to sell.
Furthermore, liquidation data reveal a heavily bullish bias, with long liquidations amounting to $499K, compared to meager $12K in shorts. This disparity often reflects over-optimism, where any failed breakout may trigger a sharp correction.
In conclusion, although the address growth and burn rate spike point to positive on-chain sentiment, the dynamic market conditions and potential risks from excessive optimism leave room for doubt about SHIB's ability to maintain its rally. Only by successfully breaching the $0.00001411 with strong volume and sustained inflows can SHIB truly reverse its downtrend. Until then, a cautious stance may be wise.
Resources
- Source: IntoTheBlock
- Source: TradingView
- Source: CryptoQuant
- Shiba Inu Predictions 2025
- SHIB Returns Forecast
- The increased number of new and active Shiba Inu (SHIB) wallet addresses, along with the surge in the token burn rate, suggest a promising revival for the cryptocurrency.
- The spike in zero-balance addresses indicates both new inflows and activity from dormant users, potentially signaling a bullish attitude among investors.
- A bullish cup and handle formation in Shiba Inu indicates a potential price breakout toward the projected target at $0.00001709, but maintaining this momentum depends on broader market participation.
- The decline in exchange reserves indicates reduced selling pressure, usually a sign of accumulation by long-term holders.
- Conversely, the 24-hour netflow's significant drop suggests a rush of traders depositing Shiba Inu, often a signal of upcoming selling.
- The heavily skewed liquidation data show a bullish bias, with long liquidations dominating short ones, reflecting over-optimism among investors.
- Despite the positive on-chain sentiment, the dynamic market conditions and potential risks from excessive optimism cast doubt on Shiba Inu's ability to maintain its rally. A cautious stance may be prudent until the cryptocurrency successfully breaches the $0.00001411 with strong volume and sustained inflows.
