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Shiba Inu (SHIB) is drawing attention from traders after on-chain data showed a massive spike in its token burn activity, potentially laying the groundwork for a strong price rebound. According to burn tracker data, the SHIB burn rate recently jumped more than 10,700% in a single day, driven by a huge transfer of tokens to a burn address — a move that removes supply from circulation and is often considered bullish for long-term value.
Technical Signals Turning More Constructive
From a technical perspective, SHIB appears to be forming a falling wedge pattern on the multi-day chart — a setup historically associated with reversals after extended downtrends. The Relative Strength Index (RSI) has also dipped into oversold territory near 30, which can signal a potential bounce is imminent. Prior instances of similar conditions led to sharp rallies as buyers returned to the market.
Another positive sign is the development of a bullish MACD divergence, where momentum starts to pick up even as prices remain depressed — a classic early reversal signal. Coupled with the repeated defense of key support levels, many analysts see this as setting the stage for a meaningful recovery.
Bullish Case: Supply Dynamics and Burn Impact
The surge in token burns has grabbed headlines because it dramatically reduces SHIB’s circulating supply — theoretically tightening supply pressure over time. Although price reaction hasn’t always mirrored every supply shock in the past, recent reductions in exchange balance and outflows suggest more holders may be accumulating rather than selling.
Longer-term holders and community activists continue to pursue burn strategies to support SHIB’s deflationary profile, with hundreds of trillions of SHIB already removed from circulation historically.
What a Rebound Could Look Like
Based on these technical and on-chain signals, some market commentators are pointing to a potential rebound of roughly 45% from current levels, as SHIB tests resistance around its previous swing highs. If the falling wedge pattern resolves higher, this could attract additional momentum from short-term traders and altcoin season flows.
However, risk remains elevated — a break below key support levels could invalidate the bullish setup and extend downside pressure before any meaningful recovery. As with all highly speculative assets, strong risk management and realistic expectations should guide any trading decisions.
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