Shiba Inu (SHIB) is experiencing significant network growth, with the number of new wallet addresses reaching yearly highs. However, this raises questions about whether this trend is sustainable or merely a short-term phenomenon.
Rapid Network Growth and Increased User Activity
The Shiba Inu network has witnessed a sharp increase in activity, with over 7,600 new wallet addresses created. This influx suggests growing interest, either through speculative investments or broader adoption, both of which could drive price appreciation.
Similarly, daily active addresses surged above 18,000, one of the highest levels this year. This combination of new users entering the ecosystem and increased activity among existing holders indicates greater community engagement.
Historically, such alignment between network growth and active addresses has often preceded price rallies. However, the recent slowdown following the network's rapid growth raises concerns about the long-term sustainability of this momentum.
Mixed Sentiment in Transaction Volumes
During the peak of network activity, Shiba Inu's transaction volume exceeded $857 million, highlighting strong trading interest. However, the volume has since dropped to $176.94 million, signaling potential market consolidation or profit-taking.
If transaction volumes and network growth continue to decline, SHIB may face challenges in maintaining its recent bullish momentum.
Can Shiba Inu Sustain Its Rally?
Shiba Inu recently tested resistance at $0.00002937, recovering significantly from previous lows. The formation of a golden cross (where the 50-day moving average crosses above the 200-day) indicates a bullish trend. However, with an RSI of 66.44, the token is approaching overbought territory.
To sustain its rally, SHIB needs to hold above the key support level of $0.000029. Additionally, renewed network growth and increased transaction volumes would bolster confidence in further price gains. Without these factors, the token risks entering a consolidation or retracement phase.
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