Shiba Inu (SHIB) has recently gained attention due to its sharp increase in burn rate, rising 3084.6% in the past 24 hours. As of the time of writing, SHIB's trading price is $0.00001356, down 2.05% in the past 24 hours.
Such a significant spike in the burn rate suggests that efforts to reduce SHIB's circulating supply could have substantial long-term effects.
However, to fully understand the potential for token price fluctuations, one must look beyond the burn rate and consider other key market indicators.
On-chain activity: Transfer volume, address decline
On-chain indicators show a significant change in SHIB's market activity.
In the past 24 hours, the total transfer volume has decreased by 7.23%, indicating a reduction in token transfer activity. Similarly, active addresses have also decreased by 40.19%, indicating less wallet activity for sending and receiving SHIB.
Additionally, the daily number of trades has decreased by 39.23%.
These declines indicate that investor participation or hesitance is decreasing, suggesting that the market is cooling down. Even with a recent acceleration in fund consumption, this reduction in activity may hinder SHIB's ability to maintain upward momentum.
Exchange dynamics: Net outflow decrease, reserves increase—what does this mean for SHIB?
Net flow data from exchanges provides deeper insights into SHIB's market dynamics.
In the past 24 hours, net deposits on exchanges have significantly decreased by 126.32%, indicating reduced selling pressure due to a decrease in deposited SHIB tokens.
Meanwhile, exchange reserves have slightly increased to 94.7 billion SHIB tokens, a rise of 0.33%. The increase in reserves could indicate that some traders are preparing for future sell-offs, which may intensify selling pressure once the SHIB price stabilizes.
Price action alert: Will it break support or break resistance?
Shiba Inu is testing the key support level of $0.00001344, and a break below it could point to the next support level at $0.00001257. On the upside, SHIB faces resistance at $0.00001522.
As of the time of writing, the 9-period moving average (MA) is above the 21-period moving average, indicating a bullish tendency in the short term.
In addition, the MACD shows a positive crossover, indicating a shift towards bullish momentum.
SHIB must break through the resistance level of $0.00001522 to maintain upward momentum, and sustain the momentum shown by the MA and MACD indicators.
Whale watch: How liquidations affect price trends
Whale activity plays an important role in shaping the price of Shiba Inu. Liquidations in the past 24 hours show that the amount of short liquidations was $30,500, while long liquidations amounted to $303,000.
A large number of long positions being closed indicates that many traders bet on a price reversal, but the recent drop has caught them off guard.
The shift in liquidations highlights the significant impact whales have on the market.
If 'whales' start accumulating SHIB, their actions may trigger a price surge. Conversely, if they continue to close positions, it may exacerbate the downward pressure on SHIB's value.
Is SHIB about to break out, or is it caught in a downtrend?
Although the memecoin has experienced an impressive surge in burn rate, its market activity indicators (including lower transfer volume, active addresses, and decreased trading volume) suggest a lack of momentum in the short term.
Additionally, exchange data shows reduced selling pressure and increased reserves, which could pose challenges in the future.
SHIB's price is currently testing a key support level, and its ability to break through resistance will depend on whether market sentiment undergoes a positive shift.
