Shiba Inu Nears Pivotal Price as Burn Rate Surges 1,086%

Shiba Inu price continued its recent decline on Monday. The meme coin reached its lowest level since November last year.

SHIB token was trading at $0.00000793, a few points above the key support level at $0.00000670. So, will it rebound or crash further as it nears a key level and as its burn rate jumps?

Shiba Inu Price Crashes Despite Encouraging Fundamentals

SHIB price has been in a strong free fall this year as investors dumped meme coins. It has plunged by over 82% from its highest point in March last year, a move that has erased billions of dollars in value.

This crash is continuing despite its encouraging fundamentals. For example, the daily burn rate continued rising. It jumped by 1,086% on Monday to 15.97 million coins. This surge was driven by four Shiba Inu holders who burned over 1.5 million tokens each.

A token burn is a situation where tokens are removed from circulation and moved to an inaccessible wallet. Its goal is to reduce the number of tokens in circulation, slashing its inflation rate.

According to Shibburn, over 410.7 billion SHIB tokens have been removed from circulation since its inception. As a result, there are now over 585 billion SHIB tokens left in circulation.

SHIB Exchange Balance Has Plunged

Another notable catalyst for SHIB price is that investors have continued to transfer their tokens from exchanges.

Data compiled by Nansen shows that exchange balances have dropped to 286 trillion, down from 289 trillion at their highest level in October this year. This supply has continued to fall and is now at its lowest level in over a year.

Plunging exchange balances are a sign that investors are not selling their tokens. Normally, investors dump their tokens by moving them to exchanges, where they swap them for stablecoins. Also, the falling exchange reserves are a sign that investors continue to buy the token’s dip.

SHIB Faces Some Major Headwinds

However, Nansen data shows that whales and smart money investors are not buying the token. Smart money investors hold 43.35 billion tokens, while whales hold 23.4 billion tokens.

The other major headwind is that demand for the token in the futures market has largely dried up, which partially explains why SHIB has plunged. For example, the coin’s weighted funding rate has remained near zero, a sign of low liquidity in the network.

More data shows that Shiba Inu’s futures open interest has dived to $77 million, the lowest level since July this year. It has plunged from the year-to-date high of $545 million.

Falling futures open interest is a sign that demand for the coin has largely dried up in the futures market, the most active one in crypto trading.

Shiba Inu Price Technical Analysis Suggests That It is Nearing a Key Level

The daily timeframe chart shows that the Shiba Inu price has been in a strong downward trend in the past few months. It has recently dropped below the important support level at $0.000010, the lowest level in April and June this year.

This price level was the lower side of the descending triangle pattern. That’s one of the most common bearish continuation signs in technical analysis.

SHIB price has remained below the 50-day and 100-day Exponential Moving Averages (EMA) and the Ichimoku cloud indicator. The Relative Strength Index (RSI) has dived and is nearing the oversold level of 30. Also, the Stochastic Oscillator has moved below the oversold level.

Therefore, the most accurate Shiba Inu price forecast would be bearish. The next key target is at $0.0000067, its lowest level in October 2023. This is a crucial support level, as the coin has struggled to move below it on multiple occasions before.

A drop below this support level will point to more downside, potentially to the psychological level at $0.0000050.