Shiba Inu, one of the most closely watched cryptocurrencies in the market, has reignited investor attention with a dramatic 1,361% spike in its 24-hour burn rate. This surge has breathed new life into the SHIB community, fueling speculation about a possible breakout. While the token’s price has declined slightly—trading at $0.00001309 with a nearly 4% drop in the past 24 hours—the sudden increase in network activity suggests something is brewing beneath the surface. However, questions remain: Is this a meaningful shift or just a temporary spike that could fade just as quickly?

Surge in Wallet Activity Signals Renewed Interest

Recent on-chain data shows that interest in Shiba Inu is rising. New wallet addresses increased by over 22% in the last week, and active wallet numbers rose by more than 23%, indicating a broader re-engagement from the community. Even zero-balance addresses, which often reflect reactivated or reset wallets, jumped by more than 31%. Historically, a rise in such metrics has been an early indicator of price movement, as more participants begin transacting on the network. This uptick in user engagement could signal that investors are positioning themselves for a larger move—though that remains to be confirmed by price action.

Technical Setup Suggests a Potential Breakout

On the technical analysis front, SHIB appears to be forming a bullish cup and handle pattern, which is often considered a positive sign by traders. The token is currently testing a key resistance level at $0.00001411. If it breaks through this threshold with strong momentum, there could be a significant rally ahead, possibly pushing the price toward $0.00001709. However, if SHIB fails to maintain support near the $0.00001051 level, the bullish pattern could be invalidated, leading to further downside. The next few trading sessions will likely be pivotal in determining SHIB’s short-term direction.

Market Sentiment Divided Amid Exchange Activity

While network and technical indicators appear bullish, exchange data shows a more complex picture. Over the last week, SHIB reserves on exchanges have dipped slightly, suggesting some degree of long-term holding. At the same time, there has been a sharp spike in the number of tokens moved to exchanges—a move typically associated with traders preparing to sell. This conflicting behavior signals that while some holders are doubling down on their positions, others may be looking to exit in case of a failed rally.

Derivatives Data Hints at Over-Leveraged Optimism

Further adding to the uncertainty is the data from SHIB’s derivatives market. Long liquidations recently totaled nearly half a million dollars, vastly outweighing short positions. This lopsided trading behavior shows that the market is heavily tilted toward bullish sentiment. While optimism can drive prices higher in the short term, it can also backfire if expectations aren’t met, leading to rapid corrections triggered by mass liquidations.

Is This the Start of a New Chapter for SHIB?

Despite the promising signals from its burn rate and user engagement, Shiba Inu’s future still hinges on its ability to overcome key resistance levels with strong buying volume. Until that happens, the current rally could remain vulnerable to a pullback. For now, cautious optimism may be more appropriate than outright excitement.