In the previous 24 hours, Shiba Inu (SHIB) has burned over 6.3 million of its tokens, an increase in its burn rate by an insane 3401%. This bold burning policy has a lot of implications on the scarcity of the token, and could lead to a rise in perceived value by the investors.
SHIB Open Interest Rises to $295 Million
These burn spikes have also coincided with bullish speculation and right now this pattern reaffirms itself. Such a degree of burn also indicates community-led dedication to long-term valuation, which might put a decent ground foundation on the next phase of the top meme coin entry to the market.
According to Coinglass, Shiba Inu open interest has also increased by more than 20% to 295 million along with the burn spike. The increase demonstrates the increase in the speculative appetite, and accumulation of long positions on leverage. An increase in open interest usually denotes bullish confidence by traders, often new players, as opposed to sell-out tendencies.
This turn of momentum can go on to bringing new capital into SHIB derivatives. Additionally, the concurrence of open interest of high magnitude with good fundamentals- such as a burn spike, aids in increasing the bullish story. Thus, the piece of data indicates that the market contestants are getting ready for the chances of a price continuation instead of reversal.
On-Chain Growth Indicates Healthy Recovery
On-chain metrics confirm rising user interest, as per IntoTheBlock analytics. New addresses have increased by 24.78% and active addresses are up 23.43% over the past week. This indicates increased retail participation and increased network action. Additionally, the increase in zero-balance addresses by nearly 29% may reflect wallet consolidation or user re-engagement. As reported by coingape recently, Shiba Inu social media activity also recorded substantial growth of 126%.
The relative increase in the prices and addresses can be a sign that there is underlying support to the price action of SHIB. Should the growth in addresses continue, it can prove the sustainability of the rally and motivate the larger crypto community to join it long term.
Is SHIB Price Out of Danger?
SHIB has just broken a descending trendline following a confirming price action of a double bottom at the $0.00001063 resistance range. The double bottom pattern, a reliable reversal signal, marked the end of a multi-week downtrend. Following this confirmation, SHIB price rallied past the $0.00001428 resistance and currently hovers around $0.00001507.
SHIB is now pushing toward the $0.00001580 resistance level, suggesting a shift in momentum. The breakout implies that bulls are back on track and could manage to recapture the zone of $0.00001759. A bullish continuation is more likely in this technical structure, as long as trading volume does not decline and instances of dips in trading are bought out.
The DMI signals have conformed to bullish market structure. The +DI is at a high of 37.57 and the -DI is at a depressed 11.60 clarifying strong upward movement. Also, the Average Directional Index (ADX) indicates trend strength at 27.98.
This divergence of the indicators indicates that the direction in the market is under firm control of bulls. Historically, these DMI patterns indicate prolonged trends motions, particularly compression by structural breakouts. Thus, the existing momentum indicators confirm the hypothesis that SHIB may extend its rallying phase in the short-term, without immediate un-sustainability.
Good time to Buy?
Conclusively, SHIB’s surge in token burns, rising open interest, and breakout from technical resistance align to paint a bullish short-term picture. With on-chain and momentum indicators showing prime strength, SHIB is well placed to move higher. As always do your own research before investing.
Coingape Staff
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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