SHIB's technicals have shown positive momentum, however the bullish trend still needs clear confirmation.
Increased trading and reduced reserves support SHIB, but MVRV gives signs that profit-taking may be on the cards.
Shiba Inu (SHIB) has been in the news recently after witnessing a 14,575% spike in its burn rate, removing 279 million tokens from circulation. This has created a wave of positive sentiment, pushing the price of SHIB up 3.43% to $0.00001889 in the past 24 hours.
However, is this motivation strong enough to promote SHIB's long-term development?
SHIB Technical Analysis – Is This Token Ready for a Bull Run?
The technical indicators of this memecoin reveal a cautiously optimistic mood. The MACD recently crossed into positive territory, opening up an upward direction. However, this new signal still lacks strength and needs further confirmation to establish a clear trend.
The RSI, at the moment, is 60.85, indicating that the Shiba Inu is not overbought, and there is potential for further price increases.
Therefore, these signals suggest that SHIB may continue to move up. However, investors should be cautious and wait for stronger indicators.
Source: TradingView
Increased Transactions and Active Addresses – A Positive Sign?
Furthermore, the increased network activity of SHIB adds a positive element to the current situation. The total number of active addresses jumped by 37.93% to 6,391 in the past 24 hours according to data from CryptoQuant. Additionally, the number of transactions doubled, increasing by 100% to 7,083.
These indicators indicate increased participation and growing demand for the Token. Increased activity is usually a sign of a healthy network. This can lead to a steady increase in price.
However, for the Shiba Inu to maintain its upward trend, the network needs to maintain a high level of activity.
Source: CryptoQuant
Exchange Reserves Decline – What Does It Mean for SHIB?
Exchange reserves fell slightly by 0.04%, with the current figure at 138.61T Tokens. Generally, when exchange reserves decline, it means there are fewer Tokens to sell – a sign that holders may be hoarding rather than selling.
This trend could ease selling pressure and support the bullish momentum. However, this small change in stocks requires cautious optimism and traders should closely monitor any significant changes in this indicator.
Source: CryptoQuant
SHIB MVRV Ratio – Should Investors Be Cautious?
Finally, the MVRV (Market Value to Actual Value) ratio is at 13.17% at the moment – a sign that the Token may be slightly overvalued. This could mean that short-term investors are taking profits and may soon take profits.
While an increase in MVRV does not necessarily predict a price decline, it does highlight the potential for selling pressure. This could limit SHIB's upside momentum.
Source: Santiment
In short, the surge in SHIB's burn rate has sparked excitement, but technical indicators suggest cautious optimism is needed.
While the increase in transactions and active addresses is a positive sign, Shiba Inu's slightly high MVRV ratio suggests profit-taking could slow its momentum.
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