Shiba Inu (SHIB) has shown signs of potential recovery despite facing hurdles, with the price hovering around $0.00001534 at press time. However, for a sustainable rally, Shiba Inu must tackle a significant challenge: the decrease in transaction count and its broader impact on demand. While the price action indicates some support around crucial levels, concerns over waning network activity could hinder its upward momentum.

Key Levels and Momentum

Shiba Inu recently saw a sweep of liquidity around the $0.00001250 zone, marking a crucial support area. This price level previously absorbed significant order volume, providing hope for a potential bounce. The MACD indicator’s convergence towards the signal line also hints at a shift in momentum, with a bullish cross potentially signaling a move toward higher resistance at $0.00003333.

However, for a rally to materialize, SHIB must hold above this support level. If the price breaks below the $0.00001250 mark, it could test even lower support levels, exacerbating sell-offs and leading to a bearish outlook. How SHIB reacts to this crucial order block will determine the next price direction, either confirming support strength or highlighting a weakening demand.

Transaction Decline: A Major Obstacle

One of the key challenges facing Shiba Inu right now is the declining transaction count. Shibarium’s daily transactions have fallen to 54.64K, coinciding with a drop in SHIB’s price, indicating reduced network activity. Lower transaction volumes often translate into decreased token utility, making the asset less attractive to investors. This reduction in network engagement could also dampen demand, further dragging down SHIB’s price.

The drop in transaction count reflects waning investor interest, which could exacerbate the price decline in the short term. The lack of active use on Shibarium might prevent SHIB from capitalizing on its burn efforts, as fewer transactions limit its exposure and utility in the market.

The Burn Rate: A Mixed Blessing

Despite these challenges, Shiba Inu has ramped up its burn efforts significantly. The burn rate has surged by 588.25%, with over 15 million SHIB tokens being burned in the last 24 hours. This aggressive burn strategy aims to reduce the circulating supply, which could help stabilize the price, especially during periods of decline. By creating scarcity, the burn rate could increase SHIB’s value if it manages to attract renewed interest.

However, while the increased burn rate may help in the short term, its long-term success is contingent upon sustained demand for SHIB. If Shiba Inu fails to regain momentum on the transaction front and struggles with network adoption, these efforts may only provide temporary relief to price pressures. Continuous burns without a growth in Shiba Inu’s utility could lead to a prolonged bearish sentiment, as the token’s supply-demand dynamics remain skewed toward oversupply without corresponding demand.

Conclusion

Shiba Inu faces a critical juncture. While the price has found support at key levels and technical indicators suggest potential bullish momentum, the declining transaction count remains a major obstacle. If Shiba Inu can stimulate renewed activity on Shibarium and maintain its burn efforts, there is a chance for a rally. However, without a significant increase in demand or broader adoption, Shiba Inu’s efforts may not be enough to reverse the current bearish trend. The coming weeks will be crucial in determining whether SHIB can overcome these challenges and embark on an uptrend.