Increased Token Burns Bolster Scarcity

Shiba Inu ($SHIB ) has seen a significant surge in its burn rate, rising by 115% last week with over 16.1 million tokens destroyed. This marks a community-driven milestone, contributing to the year-to-date total of 410 trillion SHIB burned. By removing tokens from circulation through community-led burn events, scarcity is improved, aligning with basic economic principles that could support price stability if demand remains constant or grows.

Whale Activity Sparks Volatility Concerns

Whale transactions involving SHIB have caught investor attention. A single transfer of 40 trillion SHIB (valued at $99 million) to a new wallet has raised questions about potential market impacts. Analysis reveals the transaction originated from address 0x42219, one of SHIBโ€™s largest holders, with the receiving wallet, 0x633be, linked to BitGo, a digital asset management company. While this transfer appears to be an internal reallocation, it underscores the influence of large holders on market sentiment and potential price swings.

Network Growth and On-Chain Activity

On-chain data from Santiment shows a spike in new SHIB addresses, peaking at 6,612 recently before declining to 4,612. This activity suggests growing interest in SHIB, though sustaining this growth will be critical for maintaining investor confidence and price momentum. The surge in network participation has coincided with recent price increases, but a slowdown could challenge SHIB's ability to reclaim higher levels.

Technical Analysis Highlights Volatility

SHIBโ€™s price outlook indicates heightened volatility. The Relative Strength Index (RSI) has retreated from overbought territory, signaling a consolidation phase. The Bull-Bear Power (BBP) indicator reflects a bearish trend, but a rebound from recent lows suggests renewed buying interest. If SHIB holds key support levels, further gains could be possible.

Key Support and Resistance Levels

Support Levels:

Immediate support at $0.00002500.

Additional levels to watch include $0.00002450 and the 50-day moving average at $0.00001902.

A failure to hold these levels could lead to a drop toward $0.00001833 or lower.

Resistance Levels:

Reclaiming $0.00002600 would indicate renewed bullish momentum.

Conclusion

The Shiba Inu community remains optimistic about SHIB's long-term potential, bolstered by increased burn rates and active network participation. However, whale activity, market volatility, and slowing network growth pose challenges. Key support levels and broader market trends will play a crucial role in determining whether SHIB can sustain its current momentum and attract new investment.

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Conduct thorough research and consult a financial advisor before making investment decisions.