Shiba Inu Defends Support Level Amid 3.18% Drop, 12,833% Burn Rate Surge

Shiba Inu (SHIB) has recently shown resilience by defending the $0.00001 support level, despite a daily drop of 3.18% that brought its price to $0.0000112. This stability is particularly notable given the overall market volatility, suggesting a potential for a rally. The cryptocurrency has broken out of a seven-week downtrend and is currently forming a bull flag pattern on the four-hour chart. This pattern typically indicates a pause in an upward trend before resuming, and if it holds, SHIB could rise by 18% to reach $0.0000138, a level not seen in over a month.

However, SHIB faces multiple resistance zones that could hinder its momentum. The top boundary of the bull flag around $0.000019 and the 50-day Simple Moving Average at $0.0000113 are key challenges. A sustained close above the 50-day SMA would signal positive short-term momentum. Additionally, the 20-day SMA at $0.00001252 is another resistance level to watch, as historical data suggests price gains tend to follow a break above this mark.

The burn rate of SHIB has seen a dramatic increase, surging by 12,833% over the past 24 hours. This has resulted in the retirement of more than 13 million tokens, with a weekly total of 75 million tokens being removed from circulation. Such a significant decrease in supply favors the likelihood of a price increase in the short term. The increased burn rate is attributed to a surge in daily active addresses, which grew by 27% from 2,777 to 3,534 in just one day. This increase in user activity indicates a reinforcement of community engagement, which is often associated with short-term price movements.

The Total Value Locked (TVL) in the layer-2 blockchain Shibarium has also increased, rising from $1.77 million to $1.96 million. This rise in TVL could have contributed to the increased burning of SHIB tokens and the observed activity on the network. The combination of technical indicators, such as the bull flag pattern, and fundamental factors, like the burn rate and active addresses, creates a favorable environment for SHIB to potentially reach the targeted price of $0.0000138. However, investors should remain cautious, as the cryptocurrency market is inherently volatile and subject to rapid changes.