Shiba Inu (SHIB) Ecosystem Faces Critical Developments: Burn Rate Drops, Price Breakout Predicted

The Shiba Inu (SHIB) ecosystem is facing two critical developments. One is a sharp decline in its burn rate and a potential SHIB price breakout

The Shiba Inu (SHIB) ecosystem is grappling with two contrasting developments: a sharp decline in its burn rate and a potential breakout in SHIB price, as predicted by market analysts.

Over the last 24 hours, SHIB’s burn rate has dropped nearly 20%, indicating less scarcity in the token. However, technical analysis shows that SHIB could be gearing up for a major price rally.

According to data from Shibburn, only 2.5 million SHIB tokens were burned in the past 24 hours. This marks a 20% decrease from the previous day, where 3.1 million tokens were removed from circulation.

The decline is largely tied to reduced activity on Shibarium, Shiba Inu’s Layer 2 network. Shibarium transaction volume, which contributes to SHIB burns through gas fees, has seen slow growth.

While there was a 187% increase in transactions, reaching 5,430 per day, it is still significantly lower than its peak of 28,680 in August.

In the past 24 hours, there have been a total of 2,516,677 $SHIB tokens burned and 1 transaction. Visit https://t.co/t0eRMnyZel to view the overall total of #SHIB tokens burned, circulating supply, and more.

Each Shibarium transaction incurs a BONE token gas fee, a portion of which is converted to SHIB and burned. The low activity is decreasing burn rates. The automated burn system, introduced in January 2024, is now active.

However, the ecosystem still heavily relies on increasing Shibarium’s transaction volume to drive up the burn rate.

Shiba Inu Price Analysis

While SHIB burn rates are decreasing, technical indicators are showing promising signs of a potential price breakout. A monthly chart shared by crypto analyst Krao on TradingView highlights a long-term descending trendline that has put pressure on SHIB’s price since its all-time high of $0.00008854 in October 2021.

As per the chart, SHIB has been trading in a consolidation range between $0.000005 and $0.00003, with relatively low volatility suggesting a large move coming soon.

Krao’s chart predicts a breakout above this descending trendline by early 2025, with a potential target of $0.001, marking a 7,379% increase from current levels.

This bullish scenario is supported by a neutral Relative Strength Index (RSI) on the monthly chart, indicating that SHIB is neither overbought or oversold.

Short-Term Movements

In the shorter timeframe, the meme coin is forming a symmetrical triangle on the daily chart, with price action narrowing between higher lows and lower highs.

Symmetrical triangles often lead to a breakout or a continuation of the preceding trend— in this case, potentially bearish due to the prior downtrend. However, a break above the upper resistance level of the triangle could trigger a bullish rally.

SHIB is currently hovering near the pivot point (P) at $0.00001337. If the price manages to break past the first resistance level (R1) at $0.00001562, it could gain bullish momentum. On the downside, failure to break resistance could see SHIB fall to support levels around $0.00001154 and $0.00001028.

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