Shiba Inu price rose for three consecutive days, reaching a high of $0.00001315, as cryptocurrencies rebounded and its burn rate soared.
Summary
- SHIB price is at risk of a crash despite the surging burn rate.
- Shibarium’s total value locked has plunged this year.
- The token has formed a bearish pennant chart pattern.
Shiba Inu (SHIB) has jumped by almost 30% from its lowest level this year, though it continues to underperform most major tokens. The price remains down nearly 60% from its November 2024 high.
SHIB has two potential short-term catalysts. First, its burn rate rose by 1,823% on Friday, continuing an upward trend seen in recent days. A rising burn rate is generally seen as bullish, as it reduces the circulating supply and introduces a deflationary pressure on price.
Second, the Ethereum price has staged a strong bull run, moving to above $4,000 for the first time since November last year.
It has jumped by over 150% from its April lows as SharpLink and other companies have continued its accumulation. Spot Ethereum ETFs have also continued to add assets this year. SHIB and most ERC tokens do well when Ethereum is in an uptrend.
However, SHIB still faces key headwinds that could weigh on its price. For one, Shibarium, its layer-2 network, is underperforming. Total value locked in Shibarium dropped by 7.15% in the last 30 days to just $1.7 million, highlighting weak user adoption.
Second, there are signs of declining demand for SHIB, with daily trading volume falling below $200 million on multiple occasions, a relatively low figure compared to historical norms.
Shiba Inu price technical analysis
The three-day chart shows that SHIB has been stuck in a tight range for the past several weeks. It is now trading below both the 50-day and 100-day moving averages, a bearish signal.
More notably, Shiba Inu has formed a bearish pennant pattern, characterized by a vertical flagpole and a converging symmetrical triangle. The triangle is nearing its apex, which suggests a breakout may be imminent, and in this case, likely to the downside.
If a breakdown occurs, the next key support to watch is $0.00001022, SHIB’s lowest level this year. A drop below that could open the door to further downside pressure in the near term.
