Shiba Inu Burn Rate Explodes 3,084% – Is a Memecoin Rally Imminent?

Shiba Inu just torched tokens at a pace not seen in months—over 3,000% daily burn rate spike. On-chain data shows wallets dumping SHIB into dead-end contracts like it’s 2021 all over again.

But here’s the kicker: burns don’t guarantee price pumps. Remember when the ’supply shock’ narrative made bagholders of half of crypto Twitter? Good times.

Traders eyeing the charts see a potential setup. Whale accumulation patterns mirror early stages of past SHIB rallies. Yet with memecoins, it’s always a coin toss between Lambos and liquidation.

Pro tip: Watch Ethereum gas fees. When SHIB burns ramp up, the network chokes—another ’feature’ of our decentralized future.

On-chain activity: transfer volume, address drops

On-chain metrics show a noticeable shift in SHIB’s market activity.

Over the last 24 hours, total transfer volume has decreased by 7.23%, signaling fewer coin transfers. Similarly, active addresses have dropped by 40.19%, indicating reduced wallet activity for sending and receiving SHIB.

Additionally, the number of daily transactions has fallen by 39.23%.

These declines suggest diminishing investor engagement or hesitation, pointing to a cooling market. This reduced activity may hinder SHIB’s ability to sustain upward momentum, even with the recent surge in its burn rate.

Source: CryptoQuant

Exchange dynamics: netflow drop and reserve rise – what’s the impact on SHIB?

The exchange netflow data offers deeper insights into SHIB’s market dynamics.

Over the last 24 hours, net deposits on exchanges have dropped significantly by 126.32%, suggesting reduced selling pressure as fewer SHIB tokens are being deposited.

Meanwhile, exchange reserves have increased slightly by 0.33%, reaching 94.7 billion SHIB tokens. This rise in reserves may indicate that some traders are preparing for future sales, potentially leading to heightened selling pressure once SHIB’s price stabilizes.

Source: CryptoQuant

Price action alert: Breaking support or pushing past resistance?

Shiba Inu is testing key support at $0.00001344, with a breakdown potentially targeting the next support at $0.00001257. On the upside, SHIB faces resistance at $0.00001522.

At press time, the 9-period Moving Average (MA) was above the 21-period MA, indicating that short-term momentum is leaning bullish.

Additionally, the MACD has shown a positive crossover, signaling a shift towards bullish momentum.

For SHIB to maintain upward movement, it must break through the resistance at $0.00001522 and sustain the momentum suggested by the MA and MACD indicators.

Source: TradingView

Whale watch: How liquidations are shaping the price movement

Whale activity plays a significant role in shaping Shina Inu’s price. Liquidations in the past 24 hours reveal $3.05K in short liquidations and $303K in long liquidations.

The large number of long liquidations suggests that many traders are betting on a price reversal, but have been caught off guard by the recent decline. 

The shift in liquidations highlights the significant influence of whales on the market.

If whales begin accumulating SHIB, their actions could trigger a price surge. Conversely, if they continue liquidating their positions, it may intensify downward pressure on SHIB’s value.

Source: Coinglass

Is SHIB poised for a breakout or trapped in a downtrend?

While the memecoin has experienced an impressive burn surge, its market activity metrics, including lower transfer volumes, active addresses, and declining transactions, suggest a lack of momentum in the short term. 

Furthermore, exchange data points to reduced selling pressure and rising reserves, which could present future challenges.

SHIB’s price is currently testing key support levels, and its ability to break through resistance will depend on whether market sentiment shifts positively.