Shiba Inu (SHIB), one of the most discussed altcoins in the crypto space, is drawing attention once again. Recent data points to a staggering 6,306% increase in whale inflows, along with a sharp rise in token burns and circulation. These developments have reignited bullish hopes among traders, even as the broader market remains cautious. However, technical and on-chain indicators show that not all is as it seems.

Whale Activity Signals Renewed Interest

The crypto market witnessed a major uptick in Shiba Inu activity, largely fueled by a steep rise in whale inflows. According to data tracked after the Shibarium upgrade—which enabled multi-gas token support and enhanced smart contract capabilities—SHIB saw over 6,300% growth in inflows from large holders. Much of this capital movement was led by centralized exchanges, with platforms like Gate.io contributing significantly to the $147 million spike in SHIB futures volume.

This surge could be interpreted as a sign of institutional interest or high-net-worth traders positioning for a directional move. Historically, such activity from large holders has been a precursor to major price shifts.

Token Burns Rise, Deflation Narrative Strengthens

Complementing the whale inflows, SHIB also recorded a considerable spike in token burn activity. Over 1.19 billion tokens were burned in just one week—a 1,499% increase. The 24-hour burn rate alone jumped by 958%, pointing to an aggressive reduction in circulating supply.

The burn trend has added strength to the narrative that Shiba Inu is becoming more deflationary. With higher token velocity—evidenced by nearly 495 billion tokens changing hands daily—the asset could be transitioning from a dormant phase to one of increased activity.

Valuation Concerns: NVT Ratio Hits Alarming Levels

Despite the optimistic on-chain developments, there are signs that caution may be warranted. The Network Value to Transactions (NVT) ratio for Shiba Inu has climbed to 1,194, one of the highest levels seen in recent months. This metric compares an asset’s market capitalization to its transaction volume, and higher values often suggest the price has run ahead of network utility.

When NVT spikes, it typically indicates overvaluation, implying that market enthusiasm may not be backed by real transactional use. Unless SHIB’s transaction volume increases meaningfully, this metric hints at the risk of a pullback.

Network Growth Slows Amid Rising Hype

Adding another layer of concern is the decline in network growth. New address creation has dropped significantly, with only 476 new wallets recorded—a relatively low figure compared to earlier growth periods. This slowdown suggests that while existing investors and traders are active, the network is not attracting a meaningful number of new participants.

In a healthy rally, especially one that aims for sustainability, strong network growth is essential. Without it, the likelihood of long-term price appreciation declines, and the asset may struggle to maintain upward momentum.

Technical Setup: Falling Wedge Hints at 27% Upside

On the technical front, Shiba Inu is trading within a falling wedge pattern—a structure often considered a bullish reversal signal. SHIB is holding above a strong support level while consolidating under resistance.

If the pattern plays out as expected, traders could see a breakout that pushes the price toward the $0.00001448 level, representing a potential 27% upside from current levels. Still, this projection is only valid if momentum holds and is supported by on-chain activity.

The price buildup beneath the resistance trendline shows that accumulation is taking place. However, any breakout attempt will likely need support from improved fundamentals such as rising new user adoption and increased transactional throughput.

DEX Volume Surge Signals Increased Risk Appetite

Interestingly, while centralized exchange activity has surged, decentralized exchange (DEX) volume for SHIB also exploded—jumping more than 770% in the past 24 hours. This suggests that many traders are opting for non-custodial platforms, possibly in response to increased exchange risk or to take advantage of arbitrage opportunities.

The shift toward DEX trading underlines a broader appetite for speculation, especially during uncertain market phases. High DEX volume can sometimes precede sharp price movements, although the direction often depends on overall market sentiment.

Is This Rally Sustainable?

Shiba Inu’s recent performance presents a mix of optimism and caution. On the one hand, the explosive rise in inflows and token burns has brought the asset back into the spotlight. On the other, critical fundamentals such as network growth and valuation ratios suggest the rally could face hurdles.

For SHIB to sustain a meaningful move, especially beyond the short term, there must be a resurgence in new user interest and a stronger link between token utility and price. Without these factors, any breakout—if it occurs—may be short-lived or prone to a correction.

Conclusion

Shiba Inu has once again captured market attention, thanks to a dramatic increase in whale activity and token burns. These developments, along with a bullish technical setup, make a compelling case for a short-term rally.

However, elevated NVT ratios and weakening network growth cast a shadow over long-term prospects. For now, traders may see this as a speculative opportunity—but without improved fundamentals, the risk of a bull trap remains.

As always, investors should exercise caution and monitor both technical and on-chain signals closely before making large commitments. The coming days will be crucial in determining whether Shiba Inu’s recent surge is a step toward sustained growth or a temporary reaction to hype.