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Shiba Inu price rose for three consecutive days, reaching a high of $0.00001315, as cryptocurrencies rebounded and its burn rate soared.
- $SHIB price is at risk of a crash despite the surging burn rate.
- Shibarium’s total value locked has plunged this year.
- The token has formed a bearish pennant chart pattern.
Shiba Inu ($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 pricehas 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 SharpLinkand 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.