The price of Shiba Inu has plummeted into a bear market this year, resulting in a loss of $12 billion as its market capitalization fell to $7.4 billion.
The decline in Shiba Inu (SHIB) coincided with a downturn in Bitcoin (BTC) and other meme coins, fueled by worries about a possible self-induced recession in the U.S.
However, there are indications that the current SHIB price downturn might be approaching its conclusion. Notably, the rate at which SHIB coins are being burned has significantly increased in recent weeks. Recent data shows that the burn rate surged by over 62,000% in just the last 24 hours.
This upswing in the burn rate was largely driven by a single individual who transferred nearly 460 million SHIB coins to a dead wallet. To date, over 410 trillion SHIB coins have been burned since the token’s launch, leaving approximately 584 trillion in circulation.
Shiba Inu’s price might also stand to gain from broader economic conditions. There is a chance that the stock market will recover following recent downturns prompted by Trump’s tariff initiatives.
Historically, both the stock and crypto markets tend to decline when risks escalate but often experience a rebound soon after. For instance, both markets experienced a sharp drop immediately after COVID-19 was declared a pandemic but rebounded shortly afterward.
A potential catalyst could be the upcoming decision from the Federal Reserve regarding interest rates. As the risk of recession increases, the Fed may indicate further rate reductions this year. Typically, Shiba Inu, Bitcoin, and other cryptocurrencies perform well in an environment of declining interest rates.
Technical Analysis of Shiba Inu Price
Technical indicators suggest that SHIB may be gearing up for a significant bullish breakout this year. The daily chart indicates that Shiba Inu has been creating a falling wedge pattern, defined by two descending and converging trendlines.
These trendlines meet at $0.00001260, which aligns with the lowest points observed in July, August, and September of the previous year, marking the current price as a vital support level.
The Relative Strength Index has moved above the descending trendline that connects the highest points since December last year. Likewise, the Percentage Price Oscillator has shown a bullish crossover.
Thus, it is likely that Shiba Inu’s price will experience a strong bullish breakout, with the closest psychological level to monitor being $0.000020, representing a potential increase of 60% from the current price.