Shiba Inu Price Eyes a 45% Rebound as Burn Rate Spikes 10,700%

Shiba Inu price continued its freefall and is now hovering at its lowest level since October 2023. It has been one of the worst-performing tokens after plunging by 85% from its highest point in 2024. Still, the coin may rebound in the coming weeks now that it has become highly oversold and the burn rate is soaring.

Shiba Inu Price Technicals Signal a Potential Rebound

Technical analysis suggests that Shiba Inu price may be on the verge of a strong rebound in the near term. A closer look shows that the token has slowly formed a falling wedge pattern on the three-day chart. 

This pattern, which is shown in purple, is characterized by the falling and converging trendlines. A rebound normally happens whenever these lines are nearing their confluence.

Meanwhile, the Relative Strength Index (RSI) has moved to the oversold level of 30 for the first time since March last year. The last time it dropped to this level, the token rebounded by nearly 70% within weeks, reaching a high of $0.00001750.

The MACD indicator is showing signs of forming a bullish divergence pattern, which happens when it is rising gradually as the price continues falling.

Most importantly, the coin has stalled at a crucial support level where it failed to move below several times in the past. For example, it failed to drop below this price in June and October 2023.

Therefore, the most likely scenario is where the SHIB price rebounds and hits the important resistance level at $0.00001030, which is a notable level as it was the lowest swing in August 2024, April, and July last year.

On the flip side, a drop below the key support at $0.0000050 will invalidate the bullish SHIB price forecast and point to more downside over time.

SHIB Burn Rate Soaring as Macro Factors Align 

One potential catalyst for the Shiba Inu price recovery is that the amount of tokens being removed from circulation is rising.

Data compiled by Shiburn shows that the token’s burn rate jumped by 10,527% in the last 24 hours to over 171.8 million. This surge happened as one user moved over 171 million tokens to a burn address.

A token burn happens when cryptocurrencies are removed from circulation by being stored in an inaccessible address. It aims to reduce the token’s inflation and boost its value over time.

Shiba Inu is one of the most deflationary tokens in the crypto industry with over 410 trillion having been burned over time. This burn has left it with a circulating supply of 585 trillion tokens.

Macro factors may help to boost the SHIB price this year. For example, the Federal Reserve is expected to continue cutting interest rates this year, which may lead to more demand for risky assets. 

Also, Donald Trump is considering delivering $2,000 stimulus checks using the tariff revenue, although most analysts believe that the policy will not be passed by Congress.