The Shiba Inu (SHIB) price has been caught in the ongoing altcoin sell-off, retreating by over 22% from its recent highs. However, several key factors suggest that SHIB may be poised for a strong rebound. The token has found solid support at the 50-day moving average, a significant rise in its burn rate, and stable daily active addresses are creating a foundation for a potential recovery.
SHIB’s Burn Rate Signals Deflationary Pressure
One of the most promising catalysts for Shiba Inu is its growing burn rate. On December 18, the Shiba Inu burn rate surged by an astonishing 4,766%, with over 5.2 million SHIB tokens burned, according to data from ShibBurn. This recent surge brings the total tokens burned to more than 410 trillion, with approximately 584 trillion tokens remaining in circulation.
Token burns are essential for Shiba Inu, as they help reduce its overall supply, making it a deflationary asset. These burns are driven by both voluntary actions and contributions from the Shiba Inu ecosystem, such as ShibaSwap and Shibarium, where BONE tokens generated from fees are converted into SHIB and burned. As more tokens are removed from circulation, SHIB becomes more scarce, which could increase its value over time.
Stability in Active Addresses Amid Price Decline
Despite the recent 22% drop in SHIB’s price, the number of active addresses has remained relatively stable. Data from IntoTheBlock reveals a 9.10% increase in new Shiba Inu addresses over the past week, while the number of active addresses has only dropped by 5.96%. The rise in new addresses indicates continued interest in SHIB, and the fact that the number of addresses holding SHIB has reached 1.37 million—above the 30-day average—suggests that investors are not panicking.
Technical Analysis: SHIB Finds Key Support Levels
From a technical standpoint, SHIB has found strong support at the 50-day moving average, which has acted as a crucial support level since September. Additionally, the token is holding above the Ichimoku cloud indicator, signaling that it remains in an overall uptrend. A cup and handle pattern is also forming, with the upper resistance at $0.00002941. This pattern typically precedes a breakout, and SHIB’s consolidation could lead to a price surge to that level in the coming days.
Should SHIB break above $0.00002941, the next target could be as high as $0.0000477. However, if SHIB falls below its November 15 low of $0.00002275, this bullish outlook would be invalidated.
In conclusion, while Shiba Inu faces short-term price setbacks, its strong technical indicators, rising burn rate, and stable investor sentiment suggest that a rebound may be on the horizon. Investors should keep an eye on these key catalysts as they unfold.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Shiba Inu (SHIB) Struggles with 1.9% Drop: Key Support at $0.000025 and Resistance at $0.000030
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