The burn rate of Shiba Inu [SHIB] surged by 1500%, significantly reducing its circulating supply and reigniting investor enthusiasm.
This sharp increase aligns with a breakout and retest of the trend line on the weekly chart, further fueling speculation about a potential bullish breakout.
As of the time of writing, SHIB is trading at $0.00002289, up 2.02% in the past 24 hours. Recent developments indicate an optimistic outlook, but key resistance levels remain crucial for determining the token's future trend.
Historical Background: Trends in past burn rates and their impacts
AMBCrypto analysis suggests that past surges in burn rate have often been correlated with SHIB's price movements. For example, last week SHIB's price surged by 7418%, at one point rising by 15%, but later dropped by more than 3% due to profit-taking.
This suggests that while the surge in burn rate can generate short-term bullish sentiment, it often leads to volatility.
Similarly, SHIB's current burn rate seems to be driving positive momentum, but sustaining this momentum requires broad support from the market and investors. Therefore, understanding historical trends is crucial for predicting SHIB's next moves.
Price Action Analysis: Is SHIB Ready to Break Out?
SHIB has confirmed a breakout of the trend line and retested, indicating significant upside potential.
The Bollinger Bands on the weekly chart show that prices are being compressed, suggesting an impending breakout, while the stochastic RSI indicates there is still room for further growth before reaching overbought levels.
Moreover, SHIB faces a key resistance level at $0.00003338, which is crucial for determining its short-term trend. If this level is broken, the token could gain significant momentum; however, failing to do so could lead to further consolidation or decline.
SHIB is actively speaking out, and participation continues to rise.
The number of active addresses for SHIB increased by 1.44% in the past day, indicating a growing interest from network participants. Historically, such increases in participation often precede price rises, strongly suggesting that confidence in the token is steadily increasing.
Additionally, this growth is consistent with an increase in trading activity, indicating that SHIB is becoming increasingly popular among traders and long-term holders.
Analysis of trading frequency and forex reserves
The trading volume of the memecoin increased by 1.56%, further highlighting the increasing activity on the network. Additionally, forex reserves slightly decreased by 0.08%, indicating that investors are more inclined to hold the tokens rather than sell.
The easing of selling pressure creates a favorable environment for potential price increases, enhancing the positive outlook.
Conclusion: Can SHIB Trigger a Rebound?
The surge in Shiba Inu's burn rate, increased network activity, and confirmed breakouts lay the groundwork for a potential rebound. However, breaking the key resistance level of $0.00003338 is crucial for sustaining upward momentum.
If SHIB can maintain its current momentum and leverage market enthusiasm, a significant rebound is likely.
