The price of Shiba Inu has entered a yearly demand zone that often precedes a strong rebound, according to one market analyst. The bullish forecast of an upcoming rebound comes amid a surge in the SHIB burn rate, suggesting a looming supply shock if spot demand also increases.
Shiba Inu Dips to Yearly Demand Zone
According to analysts, Shiba Inu has entered a demand zone that preceded a massive price increase. A demand zone is usually a price range where buyers are confident enough to accumulate the meme coin, leading to a notable surge in the token’s price.
Per the analysis, this demand zone has played out for four years since 2022. Each time the price dropped into this zone, a massive surge to the upside followed shortly. The last time this happened was in 2024, when the price moved from $0.00000809 to $0.000032.
Currently, SHIB is still in this zone, but it is showing signs of upside. However, for the bullish leg to be confirmed, it has to cross the resistance levels at $0.00001385 and $0.000021. Crossing this threshold could push SHIB to $0.000032.
(SHIB Price Chart – Source: X)Besides the historical data, a bullish wedge pattern also signals that an over 200% surge might be imminent. To confirm the breakout, SHIB must move above the upper trendline of this pattern.
This bullish thesis comes after an explosive surge in SHIB inflows, a sign that the meme coin’s volatility could spike soon. If the surging spot trading activity leans on the buy side, it may be bullish for the dog-themed meme token.
SHIB Burn Rate Soars Despite Reduced Network Activity
The SHIB burn rate recently exploded by more than 1,100%, removing a significant number of tokens from circulation. The surge followed a wallet burning more than 28 million SHIB tokens.
The surge happened despite the Shibarium network recording a decline in activity. According to DeFiLlama, the Total Value Locked (TVL) on the network stands at $701,101, which is a notable drop from the peak of more than $6 million recorded towards the end of 2024.
If the drop continues, it may be bearish for Shiba Inu’s price and hinder the meme coin’s potential to achieve the gains analysts anticipate.
Source: https://zycrypto.com/shiba-inu-enters-yearly-demand-zone-that-preceded-296-rally-in-2024-burn-rate-explodes-1100/
