Shiba Inu Signals Bullish Trend Amid Burn Surge
Key Takeaways
- Shiba Inu (SHIB) saw a 984% increase in its token burn rate within 24 hours.
- Technical analysis reveals a bullish “Cup and Handle” pattern, suggesting a potential 70% price increase.
- Large amounts of SHIB were withdrawn from exchanges – a sign of long-term holding strategies.
- Short position liquidations indicate waning selling pressure.
- Market sentiment remains slightly negative despite positive signals – a potential contrarian indicator.
Burn Rate Surge: What Does It Mean for SHIB?
Shiba Inu’s burn rate surged by 984% in a single day. Token “burning” refers to the permanent removal of tokens from circulation. The goal is to reduce supply and support long-term price appreciation. This increase points to heightened network activity and shows that the community is actively participating in the deflationary strategy.
At the time of analysis, SHIB was trading at USD 0.00001229 – a daily gain of 2.28%. While this increase may seem moderate, the significant reduction in circulating supply could lead to more pronounced price movement in the mid-term.
Technical Analysis: Chart Pattern Suggests Breakout
SHIB recently broke through a long-term downtrend line and successfully confirmed it as new support. A “Cup and Handle” pattern has formed – a classic bullish chart formation. Such patterns often indicate upcoming price increases.
The price target from this pattern is around USD 0.00002096, representing a potential increase of approximately 70% from the current level. Volatility in the “handle” area is decreasing – another signal of an imminent breakout once the price surpasses the USD 0.00001548 mark.
Exchange Withdrawals: Sign of Accumulation?
Data shows that approximately 54.5 billion SHIB tokens were withdrawn from centralized exchanges within 24 hours. This represents a 17.1% drop in exchange-held supply. Such movements suggest that investors are either holding their tokens long-term or reallocating them strategically.
Historically, similar outflows have occurred ahead of major price increases. It’s possible that so-called “whales” – large investors – are currently accumulating positions.
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Liquidations Fuel Upward Momentum
A look at liquidation data shows that many short positions were closed near the USD 0.00001200 level. These liquidations occur when traders bet on falling prices and the market moves in the opposite direction.
Since there are few major liquidation zones above the current price level, the path upward is technically less obstructed. This supports the case for further upside potential.
Sentiment Remains Cautious – A Good Sign?
Despite positive technical and fundamental signals, market sentiment remains slightly negative according to analytics tool Santiment. The “Weighted Sentiment” score sits at -0.189, indicating continued skepticism among many participants.
Such periods of skepticism amid positive market signals are often seen as contrarian indicators. In the past, SHIB has experienced strong rallies when the majority of traders were cautious.
Our Assessment
Shiba Inu is currently showing several bullish indicators: a sharply increased burn rate, a confirmed breakout pattern in the chart, declining exchange reserves, and reduced short activity. These factors point to a potential continuation of the upward trend.
The slightly negative market sentiment could act as an additional catalyst if hesitant investors jump in as prices rise. A sustained breakout above USD 0.00001548 would be a key signal for further potential toward the USD 0.00002096 range.
As always, monitor the market closely and watch for confirmation of key price levels. This is the best way to make informed decisions.
Sources
- TradingView
- CryptoQuant
- Coinglass
- Santiment
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