- Shiba Inu (SHIB) may be poised for a price rebound due to key factors such as aggressive token burns, which reduce supply, and favorable technical indicators suggesting it’s undervalued.
- Additionally, the positive shift towards self-custody and the growth of Shiba Inu’s layer-2 scaling solution, Shibarium, could further fuel its upward momentum.
The cryptocurrency market has experienced a rocky ride recently, with many coins seeing sharp declines. Shiba Inu (SHIB) was no exception, witnessing a significant dip of over 12%. However, there are several crucial factors pointing to a potential rebound for SHIB in the near future. Let’s take a look at the three key reasons why the SHIB price could head north soon.
1. Continuous Token Burns Boost SHIB’s Scarcity
One of the most significant developments for Shiba Inu in recent months is its aggressive token burn strategy. This process reduces the circulating supply of SHIB, which, in theory, could make the remaining tokens more valuable over time. The Shiba Inu community and team have already burned more than 410 trillion tokens, leaving around 589 trillion in circulation.
Just recently, SHIB’s burn rate soared by an impressive 1,000%, with over 51 million tokens destroyed within a 24-hour period. While the USD value of this burn might seem insignificant, the continuous reduction in supply is likely to have a long-term impact. As the circulating supply shrinks, SHIB could experience upward pressure, especially if demand begins to rise again.
2. Technical Indicators Suggest SHIB Is Undervalued
Another key factor signaling a potential rebound for SHIB is its Relative Strength Index (RSI), a popular technical analysis tool. When an asset’s RSI falls below 30, it indicates that the asset is potentially oversold or underbought, making it a prime candidate for a price correction. SHIB’s RSI recently dipped below this crucial threshold, suggesting that it might be undervalued at the moment.
A lower RSI typically indicates that there is strong potential for price recovery. Investors looking for opportunities to buy low and sell high may see this as a good entry point, potentially leading to a surge in demand and a subsequent increase in SHIB’s price.
3. Positive Exchange Netflow and Shift Toward Self-Custody
Shiba Inu has also shown a positive trend in exchange netflow, which has been negative for the past three days. This means that more SHIB tokens are being taken off centralized exchanges and moved to self-custody wallets. When investors move their assets to personal wallets, it signals a reduction in selling pressure and a potential shift towards long-term holding.
This trend is often considered bullish, as it indicates that investors are confident in the future of the asset and are less likely to sell in the short term. As the market stabilizes, this could lead to upward momentum for SHIB.
Bonus: Shibarium’s Growth Could Spark New Interest
Shiba Inu’s layer-2 scaling solution, Shibarium, continues to make waves in the crypto community. Recently, Shibarium surpassed two million wallet addresses, a milestone that demonstrates its growing popularity. With millions of daily transactions and an increasing number of users, Shibarium’s success could attract new developers and investors to the Shiba Inu ecosystem, further boosting SHIB’s value.
Conclusion
Despite recent market challenges, several factors suggest that Shiba Inu may be on the verge of a price recovery. With continuous token burns, favorable technical indicators, and a shift towards self-custody, SHIB could see significant growth in the near future. Moreover, Shibarium’s success adds another layer of optimism, as it could attract more users and developers to the platform. Investors and enthusiasts alike will be keeping a close eye on these developments in the coming weeks.
