Shiba Inu (SHIB) has been in the spotlight lately due to a staggering 3829.51% increase in its burn rate over the past week. This significant uptick has led to speculation about a possible price surge driven by supply dynamics for the meme coin. As of February 5, 2025, SHIB was trading at $0.00001529, reflecting a 5.88% rise in the last 24 hours, with a market cap exceeding $9.18 billion.
Despite the impressive burn rate, the crucial question is whether Shiba Inu can overcome key resistance levels and maintain its bullish trend, or if the price will revert to a downward trajectory.
Does an Explosive Burn Rate Guarantee Price Gains?
While SHIB’s burn rate has skyrocketed by 3829.51%, history indicates that such spikes do not always lead to price increases. For instance, a previous burn rate increase of 612% had little effect on SHIB’s price due to low market demand.
As noted in AMBCrypto’s analysis, “While burns help reduce supply, they must be accompanied by strong buying pressure to drive prices higher.”
Without a corresponding rise in demand, even significant burns may not result in sustained price growth. Thus, although the burn rate may lower the circulating supply of SHIB, its price is primarily influenced by overall market sentiment and demand for the coin. The key to ongoing price appreciation lies in whether SHIB can create enough buying pressure to surpass critical resistance levels.
How Many SHIB Holders Are in Profit?
A vital factor in SHIB’s price movement is the profit distribution among its holders. Currently, 40.42% of SHIB holders are in profit, meaning they are holding at a price higher than their initial purchase. Conversely, 55.09% of holders are “Out of the Money,” having bought at higher prices and still facing losses.
This disparity could create selling pressure, as many holders may seek to exit at break-even points, hindering further price growth. However, if Shiba Inu can break through the $0.000016 level, it might reignite bullish sentiment.
Attracting more buyers and encouraging accumulation. According to data from IntoTheBlock, a breakthrough above $0.000016 could spark increased bullish activity and reinforce the upward trend. The interplay between profit-taking and new buyers will be crucial in determining SHIB’s capacity to keep rising.
SHIB’s Chart Analysis: What’s the Next Price Move?
Technical analysis of Shiba Inu’s daily chart shows a descending wedge pattern, which typically precedes a breakout. Currently, SHIB is encountering resistance at $0.00001686, a critical level that needs to be surpassed for further gains. If SHIB manages to break through this resistance, the next target would be the $0.00002011 level, potentially leading to a more substantial rally.
However, if SHIB cannot maintain support at $0.00001290, a deeper pullback may occur, wiping out recent gains and possibly halting the bullish trend. The price movements in the upcoming days will be vital, as traders will closely monitor these key levels to determine if SHIB can overcome the resistance or face a retracement.
Retail Participation Declining Despite Price Surge
In spite of the recent price rise, on-chain data indicates a troubling trend: a notable drop in retail participation. New Shiba Inu addresses have fallen by 18.83%, and active addresses have decreased by 16.76%, according to IntoTheBlock analytics. This suggests a waning interest from retail investors, which could hinder the coin’s price rally.
Conversely, whale activity has surged, with transactions exceeding $100K increasing by 611.69%. This indicates growing institutional interest in SHIB, which may help stabilize the price if retail traders return.
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As noted in IntoTheBlock’s analysis, “the increase in whale transactions suggests potential institutional support for SHIB, but the overall price momentum will hinge on the involvement of retail traders”
Conclusion: Will SHIB Sustain Its Rally?
While the burn rate of Shiba Inu is certainly impressive, the price movement is influenced by several important factors, such as demand, trading volume, and retail involvement. The critical resistance level at $0.00001686 is essential for SHIB to surpass in order to maintain its upward momentum. If SHIB cannot generate sufficient buying pressure, it may face consolidation or even a pullback.
According to a report from AMBCrypto, “The true test for SHIB will be whether demand and volume align with the burn event.”
If buying interest increases and SHIB breaks through this resistance, the coin could continue to grow. However, without ongoing demand, Shiba Inu might find it challenging to sustain its rally and could see a downturn. Keep following The Bit Journal and keep an eye on Shina Inu crypto trends and analysis.
FAQs
What is Shiba Inu’s current price?
As of February 5, 2025, Shiba Inu’s price is $0.00001529, reflecting a 5.88% rise in the last 24 hours.
How much has Shiba Inu’s burn rate increased?
Shiba Inu’s burn rate has surged by 3829.51% over the past week, showing a significant decrease in supply.
What is the next key resistance level for SHIB?
The key resistance for Shiba Inu is at $0.00001686. Successfully breaking above this level could result in further price gains.
Is SHIB’s price movement dependent on retail activity?
Although whale activity has risen, retail participation has dropped, which may restrict SHIB’s price momentum.
Glossary of Key Terms
- Burn Rate: The rate at which tokens are permanently removed from circulation to reduce supply.
- Whale Activity: Large transactions made by institutional investors or individuals holding a significant amount of cryptocurrency.
- Resistance Level: A price level where an asset experiences selling pressure, preventing it from rising further.
- Active Addresses: The number of addresses that have conducted transactions within a specific time frame.
References
- AMBCrypto’s Article on Shiba Inu’s Burn Rate:
AMBCryptoShiba Inu Analysis - IntoTheBlock Analytics:
IntoTheBlock - Shiba Inu Price and Chart Analysis on TradingView:
ShibaInu on TradingView
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The price predictions and financial analysis presented on this website are for informational purposes only and do not constitute financial, investment, or trading advice. While we strive to provide accurate and up-to-date information, the volatile nature of cryptocurrency markets means that prices can fluctuate significantly and unpredictably.
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