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Shiba Inu continues to capture attention with the recent burning of 128 million tokens. This reduction in supply has led to discussions among traders about a potential price increase of up to 300%. However, despite technical analyses suggesting upward momentum, the coin has faced setbacks due to broader market trends and macroeconomic factors, urging caution among traders.
Token Burning and Supply Reduction
The token burning mechanism of Shiba Inu gradually reduces the circulating supply, potentially influencing price increases. According to data released by Shibburn, 128.22 million tokens were incinerated last week, resulting in a 120.3% rise in the weekly burn rate.
To date, approximately 410.72 trillion Shiba Inu tokens have been burned; however, the total circulating amount still stands at 584.30 trillion. Investors believe that this burning mechanism may alter the supply-demand balance in the long run, though the effects on pricing may take time to manifest.
Technical Analysis and Bullish Scenario
Recent technical analyses indicate that Shiba Inu is preparing to test significant resistance levels. A report from CoinGape Media highlights the formation of an inverse head-and-shoulders pattern in the token’s charts, typically regarded as a precursor to bullish trends.
Additionally, on-chain data reveals an increase in active addresses for Shiba Inu. The activity of large investors is identified as a factor contributing to price volatility, with technical indicators suggesting a resistance level at $0.0000326.
Experts emphasize that Shiba Inu’s price could see substantial surges in the future. However, they also note that macroeconomic developments and overall trends in the cryptocurrency market will play a crucial role. Investors are advised to evaluate risks and opportunities carefully rather than relying solely on formations and historical data.
