Shiba Inu's 24-Hour Burn Rate Surges 1,361% Amidst Robust On-Chain Activity

Shiba Inu has recently experienced a surge in on-chain activity, which has sparked optimism within the community. The token's 24-hour burn rate has increased by a remarkable 1,361%, indicating a significant rise in user engagement. Despite a 3.95% drop in price over the prior day, the underlying demand for SHIB remains robust. On-chain metrics reveal a 22.10% growth in new addresses and a 23.07% rise in active addresses over the last week, with zero-balance addresses surging by 31.41%. This suggests a mix of new user inflows and re-engagement from previously inactive wallets.

Historically, such increases in user activity have preceded periods of price volatility. The potential for this trend to translate into a sustained price rally depends largely on participation from larger investors, including whales and institutional players. The organic user growth presents a solid foundation for potential upside, but market dynamics pose challenges for sustained momentum and breakout potential.

Technical analysis indicates that SHIB is presenting a bullish cup and handle pattern on its price chart, with a potential neckline resistance currently at $0.00001411. A confirmed breakout above this threshold could energize upward price momentum toward a target of around $0.00001709. However, traders should note the significance of the support level at $0.00001051. A fall below this price could invalidate the bullish pattern and potentially lead to additional decline. The following sessions are crucial for assessing whether SHIB can sustain its upward momentum or if it will encounter renewed selling anxiety.

While the on-chain metrics provide a positive outlook, the overall market scenario may not be as favorable. The slight decline in exchange reserves of 0.12% over the past week suggests reduced selling pressure and may imply accumulation by long-term holders. Conversely, the 24-hour Netflow saw a dramatic plunge of 157.97%, indicating a rush to deposit SHIB, often an intent to sell. Additionally, liquidation data shows a noteworthy bias towards long positions, with long liquidations amounting to $499K, compared to just $12K in shorts. Such an imbalance raises the potential for sudden market corrections, especially if a breakout fails to materialize.

In summary, while Shiba Inu’s increase in burn rate and address activity indicates favorable on-chain sentiment, underlying market data suggests caution. For SHIB to establish a solid breakout, the price must exceed $0.00001411 accompanied by robust trading volume and continued user inflows. Until key price levels are validated, prudence may well be the best strategy.