Shiba Inu's Path to a New All-Time High: Analyzing On-Chain Metrics and Breakout Signals

On-Chain Metrics: Deflationary Momentum vs. Structural Challenges

Shiba Inu (SHIB) has witnessed a dramatic surge in burn activity in September 2025, with over 4.5 million tokens burned on September 4 alone-a 6,200% increase compared to the prior day, according to a NewsWatchTV report. This deflationary effort has removed approximately 44 billion SHIB from circulation since the start of 2025, per a Binance post, yet the token's circulating supply remains at ~589.24 trillion tokens, as noted in the NewsWatchTV report. At the current burn rate of 840 billion SHIB per month, analysts estimate it would take tens of thousands of years to reduce the supply by 90–99.999%, a point also highlighted in the NewsWatchTV report, underscoring the mathematical improbability of reaching a $1 price point without an unprecedented shift in market dynamics.

Wallet distribution data further complicates the narrative. Over 62% of SHIB's supply is concentrated in just ten wallets, a concentration highlighted by the NewsWatchTV report, raising concerns about potential sell pressure. Recent on-chain activity suggests these large holders are rotating their SHIB positions into other Ethereum-based meme coins like Little Pepe (LILPEPE), signaling a potential narrative shift in the market noted by the same NewsWatchTV coverage. Meanwhile, transaction volume has shown mixed signals: daily volume rose 101% to $212 million in early September, but Shibarium, SHIB's Layer-2 network, collapsed to 10,000 daily transactions from 4 million-a 99.75% drop, according to a TheStreet report. This collapse highlights ongoing challenges in sustaining network utility and user engagement.

Social Sentiment and Technical Breakout Signals

Despite structural headwinds, SHIB has shown signs of a potential breakout. Technical analysts, including "Satoshi1242," note that SHIB has broken out from a descending trendline on lower timeframes, a classic indicator of near-term bullish momentum, as discussed in an Elevenews analysis. The token's price surged 2% in 24 hours to $0.00001316, with market capitalization holding at $7.75 billion, and some analysts project a 25% rally toward $0.00001650, with further gains potentially reaching $0.0001 if the breakout sustains-views summarized in the Elevenews analysis.

Historical backtesting of SHIB's price behavior around resistance levels from 2022 to 2025 reveals critical insights. When SHIB broke above key resistance levels (e.g., 52-week highs or swing highs), the average return over the subsequent 30 days was 12.3%, with a hit rate of 68% (i.e., 68% of breakouts led to sustained price gains), according to a resistance backtest. However, the strategy also carried significant risk, with a maximum drawdown of -34.5% in cases where breakouts failed to hold. These findings suggest that while resistance-level breakouts can signal short-term opportunities, they require strict risk management due to SHIB's inherent volatility.

Community-driven sentiment also plays a role. Social media platforms are abuzz with discussions about SHIB's "accumulation phase," with retail investors citing regular bullish divergences on price charts, as covered by a Shib News report. Javon Marks, a prominent crypto analyst, highlights a 150% upside potential to $0.000032, driven by a combination of token burns and Shibarium's long-term development, a point made in the Shib News report. However, historical patterns caution against over-optimism: while SHIB saw a 27% spike in September 2024, per InteractiveCrypto data, its September 2025 performance has been mixed, with trading volume dipping to $150 million in early September as noted by InteractiveCrypto.

Challenges and Risks to a New All-Time High

SHIB's historical all-time high of $0.00001430 (set on September 14, 2025), according to CoinLore historical data, remains a critical benchmark. While recent burn activity and technical indicators suggest a potential retest of this level, several risks persist. First, the token's massive circulating supply and concentrated ownership create structural vulnerabilities. Even with a 2,033% surge in burn rate in early October 2025, reported by a Benzinga report, the supply reduction is marginal relative to the total outstanding tokens. Second, Shibarium's collapse raises questions about the ecosystem's utility and developer activity. Without meaningful use cases, SHIB's value proposition remains speculative.

Additionally, meme coins like SHIB are inherently volatile and heavily influenced by retail sentiment. While community-driven hype can drive short-term rallies, sustaining momentum requires a clear catalyst-such as a major partnership, Shibarium's revival, or a broader crypto market upturn. Analysts emphasize that SHIB's price action remains contingent on external factors, with no guarantee of breaking above its September 2025 peak, a caution also raised in the NewsWatchTV report.

Conclusion: A High-Risk, High-Reward Scenario

Shiba Inu's on-chain metrics and technical indicators present a mixed picture. The surge in burn rates and transaction volume suggest growing deflationary momentum and buy-side interest, while wallet concentration and Shibarium's struggles highlight structural risks. Social sentiment and breakout signals offer optimism, but the token's path to a new all-time high hinges on overcoming its supply challenges and proving utility beyond speculative trading.

For investors, SHIB represents a high-risk, high-reward opportunity. While the technical case for a 25–150% rally exists (as outlined in the Elevenews analysis and the Shib News report), the token's ability to sustain momentum will depend on broader market conditions, ecosystem developments, and the resolve of its community. As one analyst aptly put it: "SHIB's journey is a race between deflation and dilution"-a race with no clear finish line in sight.