- SHIB’s burn rate spiked 600%, reducing supply by over 3 million tokens on January 22nd.
- Shiba Inu coin price hovers around the 200 day EMA mark and struggled to regain pace.
Shiba Inu coin has been in a sideways trend since last month, recording a 10% decline till January 22nd. It plummeted below the 200 day EMA mark and sparked concerns among investors whether the memecoin could reverse its course.
However, the recent burn rate of Shiba Inu noted a rise of over 600%, which wiped out over 3 million tokens in the last few hours.
Typically, when burn rate spikes it often generates the short term bullish sentiment and precedes a price rally.
At press time, SHIB price was trading at $0.00001984, noting a decline over 3.85% in the past 24 hours. Its market cap stood at $11.68 Billion, ranked 17th in the crypto market.
Amidst the significant burn rate spike, Shiba Inu coin is still reflecting selling pressure, which presses a question that- Will this recent burn trigger a reversal rally?
Burn Rate Jumps: How the Market Reacted
Data from Shibburn shows that nearly 3 million tokens have been burnt, bringing the hike to over 612% in the past 24 hours. However, reducing a supply generally leads to increased value, but this only happens when there is a simultaneous increase in demand.
Despite the significant reduction in supply, the price action indicates a lack of demand which signifies a bearish cue. By the demand and supply rule, as the supply drops, it often precedes a price rebound.
However, there were no signs of price rebound as the memecoin still traded in red and investors were looking in panic.
Is Shiba Inu Coin Set for Rebound: Here’s an Analyst’s Predictions
A recent post by Rose Premium Signals on X highlighted that Shiba Inu has marked multiple retest around the demand zone of $0.00001947 and offers an opportunity to go long on it.
However, investors need to note the mid term target of $0.00002518 and $0.00003218 for booking their profits.
While a target of $0.00004018 can also be seen in the subsequent sessions, a stop loss of $0.00001018 must be followed.
Apart from the analyst predictions, the holding data from the IntotheBlock sheds light on the trend. Around 50% of the holders were profitable at press time.
This profitability data coupled with the burn rate surge paints an optimistic picture for SHIB’s community and its potential rebound in the coming sessions.
Shiba Inu Price Analysis: Key Levels to Watch
On the daily time frame, SHIB price is trading with a bearish bias, below the key EMAs and faced rejections during the bounce. It highlights a sellers’ dominance and the lack of buying momentum.
The Relative Strength Index (RSI) line had a reading of 40, representing a weak momentum and a negative crossover, confirming the bearish trend.
The immediate support zone of $0.00001500 was the make or break zone for Shiba Inu coin. Below the mark, a next round of selloff can be anticipated.
On the other hand, above the $0.00002500, a range breakout could be in play which could trigger a fresh trend reversal.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
