Shiba Inu Price Drops 7.1% Amid Market Tensions, Trading Volume Surges 72%

The price of Shiba Inu (SHIB) has decreased by 7.1% over the past 24 hours, influenced by global market reactions to tensions between Israel and Iran. Despite this decline, trading volumes have surged by nearly 72%, accounting for more than 5% of the token’s circulating supply. This surge in trading volume suggests heightened activity and interest in the token, even as its price has dropped.

Other tokens in the same category, such as Pepe (PEPE) and SPX6900 (SPX), have experienced more significant pullbacks of 20.2% and 17.5% respectively during the same period. This comparative performance highlights the relative stability of SHIB amidst broader market volatility.

One key metric that could support a bullish outlook for SHIB is the significant increase in its burn rate. According to Shib Burn, a website that tracks the number of SHIB tokens burned in real time, the token’s burn rate experienced a 112,839% increase in just 24 hours. During this period, nearly 112 million SHIB tokens were taken out of circulation. This substantial burn rate implies a surge in transaction volumes, potentially driven by increased sales during the recent price pullback.

However, it is important to note that the number of burned tokens represents only a tiny fraction of the token’s circulating supply of nearly 590 trillion SHIB. In the near term, this reduction in supply could help cushion SHIB’s decline by limiting the available tokens on the market.

Looking at the daily chart, the price action of SHIB broke below its trend line support a few days ago, leading to a sharp decline. The token has since failed to move above its short-term exponential moving averages (EMAs) and continues to trade below its 200-day EMA. This technical analysis suggests a bearish mid-term outlook. However, as the price approaches a key support level at $0.00001050, there is potential for a bounce that could retest the former trend line support, which coincides with the 200-day EMA at $0.00001546.

If SHIB manages to bounce off this key support level, it could indicate a bullish short-term price prediction. While reaching $1 for SHIB remains speculative, the token does offer promising upside potential if this support holds. Traders should closely monitor the price action as it approaches this critical level to gauge the likelihood of a rebound.