Shiba Inu (SHIB) recently saw an 82% decline in its burn rate, one of the steepest slowdowns in recent years. This fall in token burns has caused concern over the state of play in the  market. Although this drastic decline in burns could be viewed as a negative signal, the supporting on-chain metrics and technical indications indicate that SHIB could still be on the verge of a possible change of momentum, signaling a possibility of an impending price recovery in the near future.

When this article was written, SHIB was trading at $0.00001095, a modest 2.23% drop. While this price drop may be disappointing at first, a number of factors suggest that SHIB may be gearing up for a rebound. The SHIB burn rate, which is an important driver of market sentiment, has recently dropped sharply, indicating that fewer tokens are being taken out of the system. Usually, higher burn rates reflect higher demand and zeal for the token, but the slowdown may indicate that investors are accumulating SHIB quietly, holding out for the right moment to push its price up. This lower burn rate may also reflect a temporary dip in activity, but there is the possibility of renewed market interest as the broader crypto scene shifts.

The drop in SHIB’s burn rate is coinciding with the token’s price action, which has recently bottomed out in a key accumulation zone between $0.00001035 and $0.00001393. This area of price has traditionally served as a demand zone where persistent buying pressure has worked to stabilize the value of the token. With months of falling wedge pattern trading, SHIB’s recent pop from this accumulation zone shows preliminary indications of bullish momentum. A collapsing wedge pattern is usually considered a bullish continuation pattern, and the price action could indicate that SHIB is building up for a breakout.

In addition, the Relative Strength Index (RSI) of SHIB is 34.90, leaving the token close to being oversold. The RSI is a widely used momentum oscillator that indicates whether an asset is oversold or overbought. When the RSI of an asset drops to below 30, it is normally in oversold territory, and this can be a signal for reversal or price reversal. As SHIB gets close to this point, there is increasing sentiment among traders that the coin may be close to the bottom of its present price action and might soon experience a change in sentiment to lead to a price reversal upwards.

But for SHIB to confirm a sustained rally, it has to breach the primary resistance point at $0.00001393. If SHIB is not able to breach the resistance and keeps on fighting around this price level, it may test the support at $0.00001035. Failure to hold support at this level may trigger a further dip, which may take SHIB to $0.00000800 if selling increases. A successful breakout above the resistance level at $0.00001393 would indicate that SHIB is gearing up for a bigger rally, possibly taking the price to new heights. For this, though, continuous buying pressure shall be required.

The last and most important aspect of SHIB’s price behavior is the mood of its holders. As per the In/Out of the Money chart, which monitors the price at which the majority of holders purchased their positions, 89.95% of SHIB holders are presently in loss, and only 9.37% are in profit. This indicates that the majority of SHIB investors are underwater, and most of them would be hesitant to sell at a loss. This may set the stage for upward price action to encounter tremendous selling pressure as owners try to close out positions at breakeven points. Moreover, only 0.67% of SHIB holders are in the money, which means new investments in SHIB at this level are speculative without a definitive bullish trigger to push prices higher.

In spite of these obstacles, SHIB is demonstrating resilience, and the possibility of a turnaround remains in sight. The secret to a long-term uptrend is firm buying volume, higher investor optimism, and a change in market mood. Although the 82% decline in the burn rate is problematic, the overall market structure and technicals point toward the possibility that SHIB may be on the verge of a breakout. The next weeks and days will be decisive as to whether or not SHIB will be able to hold existing support levels, break through its major resistance points, and establish enough momentum to hit new high prices. Provided that SHIB is able to break through resistance and attract enough buyer interest, it may usher in a fresh bullish trend for the token. The situation is fluid, and the next direction of SHIB will be a function of a mix of market forces, investor sentiment, and technical events.