Shiba Inu: Assessing if a supply shock could spark SHIB’s rebound

Key Takeaways

What drives the emerging SHIB supply-shock narrative?

Rising long-term burns, shrinking supply, and strong demand-zone reactions collectively strengthen SHIB’s supply-shock momentum.

How do on-chain buyer signals reinforce the probability of a breakout?

Falling Exchange Reserves and dominant taker-buy pressure show buyers absorbing sell orders and supporting a potential trend reversal.

Shiba Inu’s [SHIB] burn data reveals sharp volatility, and this pattern now sits at the center of the emerging supply-shock conversation. 

The 7-day burn spike crossing 2,000% shows aggressive long-term supply removal, while the steep drop in the last 24 hours shows short-term inconsistency. 

Even so, the broader trend leans toward contraction, and this contraction increases underlying pressure on circulating supply. 

Moreover, the chart shows SHIB holding its demand zone despite recent weakness, suggesting buyers respond quicker whenever supply thins. 

This combination builds a fundamental backdrop that strengthens the potential for a notable supply-driven shift in momentum.

Is Shiba Inu preparing for a reversal?

SHIB continues to defend the 0.00000885–0.00000900 demand zone with repeated reactions that highlight strong buyer interest. 

The price structure shows the price sitting near the upper boundary of the descending channel, and this position leaves SHIB close to a potential breakout structure.

Additionally, at press time, the RSI was hovering around 39, indicating that bearish momentum was beginning to ease.

The indicator gradually forms higher lows, which reflects a subtle shift toward bullish control. Moreover, a push toward the 50 level would strengthen this momentum change. 

The chart also displays a clear breakout path toward 0.00001029, 0.00001118, and eventually 0.00001301, giving SHIB a clean set of targets if momentum follows through.

Source: TradingView

Shiba Inu Exchange Reserves drop!

Exchange Reserve USD showed a 6.79% decline, at press time, and this decline indicates that fewer SHIB tokens sit on trading platforms where they could be sold immediately. 

This trend matters because falling reserves often align with reduced selling pressure and healthier accumulation behavior. 

Moreover, SHIB’s price continues to hold its demand zone even during market pullbacks, which supports the idea that the reduced supply on exchanges helps stabilize downside movement. 

Additionally, this decline reinforces the supply-shock narrative formed by burn data. With fewer tokens available, sellers lose influence while buyers gain control, especially when price trades near a multi-week support region.

Source: CryptoQuant

Is buyer strength returning?

Spot Taker CVD now signals consistent buyer dominance, and this shift suggests market buyers willingly absorb sell orders during every retest of the demand zone. 

This behavior strengthens the bullish argument because sustained taker-buy pressure often precedes momentum shifts. 

Moreover, this metric aligns with the RSI’s early recovery signs and repeated demand-zone reactions on the price chart. 

The combination shows traders confidently stepping into SHIB whenever it dips, limiting downward movement. 

Additionally, the CVD structure shows buyers applying controlled pressure rather than sporadic activity. This supports a stable environment for a breakout if volume increases around channel resistance.

Source: CryptoQuant

Conclusively, Shiba Inu now sits in a tight technical zone where rising taker-buy pressure, falling Exchange Reserves, resilient demand support, and improving RSI momentum form a constructive setup. 

The burn-rate volatility adds uncertainty, yet the broader trend still leans toward a potential supply-shock environment. 

Considering these combined signals, SHIB shows early evidence of strength that increases the probability of a breakout above the descending channel soon.