The Shiba Inu (SHIB) ecosystem is facing two critical developments. One is a sharp decline in its burn rate and a potential SHIB price breakout, as predicted by market analysts.
Over the last 24 hours, SHIB’s burn rate has dropped nearly 20%, signaling reduced token scarcity. Despite this downturn, technical analysis shows that SHIB could be gearing up for a major price rally.
According to data from Shibburn, only 2.5 million SHIB tokens were removed from circulation in the past 24 hours. This was a 20% decrease from last day. This follows a prior day’s surge when 3.1 million tokens were burned.
The decline is closely tied to reduced activity on Shibarium, Shiba Inu’s Layer 2 network. Shibarium transaction volume, which drives SHIB burns through gas fees, has seen slow growth. While there was a 187% increase in transactions, reaching 5,430 per day it is still far below its peak of 28,680 in August.
Each Shibarium transaction incurs a BONE token gas fee, a portion of which is converted to SHIB and burned. The low activity is bringing down burn rates. The automated burn system introduced in January 2024 is now in place. However, the ecosystem still relies heavily on Shibarium’s transaction volume to increase the burn rate.
Shiba Inu Price Analysis
While SHIB burn rates are down, technical indicators show promising signs of a potential price breakout. A monthly chart shared by crypto analyst Krao on TradingView highlights a long-term descending trendline that has pressured SHIB’s price since its all-time high of $0.00008854 in October 2021.
According to the chart, SHIB has been trading in a consolidation range between $0.000005 and $0.00003, with relatively low volatility suggesting an imminent large move.
Krao’s chart predicts a breakout above this descending trendline by early 2025, with a potential target of $0.001, representing a 7,379% increase from current levels.
This bullish scenario is supported by a neutral Relative Strength Index (RSI) on the monthly chart, indicating that SHIB is neither overbought or oversold.
Short-Term Movements
In the short term, the meme coin is forming a symmetrical triangle on the daily chart, with price action tightening between higher lows and lower highs.
Symmetrical triangles often signal a breakout or continuation of the preceding trend— in this case, potentially bearish due to the prior downtrend. However, a break above the upper resistance level of the triangle could ignite a bullish rally.
SHIB is currently hovering near the pivot point (P) at $0.00001337. If the price can push past the first resistance level (R1) at $0.00001562, it may gain bullish momentum. On the downside, failure to break resistance could see SHIB fall to support levels around $0.00001154 and $0.00001028.
