The destruction rate of Shiba Inu [SHIB] surged 3,679% in 24 hours, causing its circulating supply to decrease sharply and its price to rise accordingly.
As of press time, SHIB is trading at $0.00002612, up 8.82%, and its gains have caught the attention of the market. However, the volatility of market dynamics has made investors doubt whether this momentum can be sustained.
SHIB's Key Resistance Levels and Bullish Indicators
The surge in SHIB’s price has brought it close to the critical resistance level of $0.00003076. This level is a major hurdle; however, if SHIB breaks above it, it could open the way to the next target of $0.00004587.
Clearing this resistance could signal a continuation of the strong bullish momentum, thereby attracting more buying interest.
Conversely, failure to break above this threshold could result in a pullback and possibly consolidation around lower support levels. Traders are watching this closely as the outcome could influence SHIB’s near-term trajectory.
The Average True Range (ATR) is currently 0.00000237, indicating rising volatility, reflecting increased trading activity around SHIB. Increased volatility suggests that large price swings may continue, especially as SHIB approaches significant resistance levels.
Therefore, traders should be prepared for potential volatility as market participants react to SHIB's next move.
Additionally, Shiba Inu’s moving averages recently experienced a bullish crossover, with the short-term 9-day moving average moving above the 21-day moving average.
This crossover is a positive technical indicator and is often seen as a precursor to continued price gains. Therefore, if SHIB can maintain its current momentum, this setup would strengthen its potential upside.
SHIB foreign exchange reserves suggest potential selling pressure
The exchange reserves indicator is at 138.5537 trillion, reflecting a small increase of 0.04% over the past 24 hours. This small increase may seem insignificant, but it could indicate potential selling pressure as exchanges hold an increasing number of SHIB tokens.
Typically, higher reserves indicate that investors are preparing for liquidity, which could be consistent with profit-taking. Therefore, if Shiba Inu is unable to maintain current levels, this selling pressure could intensify, hindering its price from rising.
Growing on-chain activity supports momentum
Interestingly, Shiba Inu’s active addresses increased by 0.81%, indicating increased network activity and growing community interest. The increase in engagement was further supported by a 0.74% increase in transactions to 18.82K, highlighting active trading and transfers of SHIB tokens.
This on-chain metric generally reflects strong community support, which is critical to maintaining SHIB’s price over the long term.
Market sentiment and open interest indicate optimism
Highlighting the growing optimism in the market, open interest surged 14.38% to $94.83 million. High open interest suggests that traders are increasingly betting on the Shiba Inu's future performance, perhaps speculating that prices will continue to rise.
However, with increased open interest comes increased risk, as leveraged positions can magnify both gains and losses. Therefore, while optimism remains high, caution is advised due to the potential for increased volatility.
