Exploring the Factors Behind SHIB's 10% Surge Today

The cryptocurrency SHIB has recently broken out of a prolonged downward trend, due to a rise in its burn rate and growing interest from investors in new developments within its ecosystem.

On March 26, Shiba Inu (SHIB) saw a 10% increase in price, reaching an intraday high of $0.00001485, with a market cap of $8.6 billion. This surge allowed it to surpass major players like Sui (SUI) and Hedera (HBAR) and become the 19th largest cryptocurrency, according to data from CoinGecko.

Three factors are contributing to SHIB's recent gains.

Firstly, the Shiba Inu team has hinted at Shib Finance, a significant DeFi upgrade that will introduce a range of financial tools, such as reputation-based lending and undercollateralized borrowing. The upcoming platform aims to combine TradFi and DeFi with features like Karma Engine, Shib Attestation, and a privacy-focused identity layer.

Secondly, SHIB has been listed on BingX Futures, providing over 10 million global users the opportunity to trade the memecoin with leverage.

Lastly, there has been a recent surge in its burn rate. On March 23, Shiba Inu's daily burn rate increased by nearly 8,100%, burning over 1 billion SHIB tokens in a single day. According to Shibburn, more than 410.74 trillion tokens have been burned since its creation, leaving the circulating supply at about 589 trillion.

On-chain metrics for SHIB are also showing indications of growing bullish sentiment. The daily active addresses on the network have risen by over 20% since March 18, as per Santiment data.

Additionally, social sentiment around the token has become positive, especially after former U.S. President Donald Trump sparked interest in meme coins with a Truth Social post about the official Trump memecoin, TRUMP.

SHIB price analysis

On the daily chart, SHIB recently broke out of a falling wedge pattern that had been developing for the past four months, which is a classic bullish formation. This kind of breakout often suggests a potential trend reversal, implying that SHIB might be preparing for a stronger upside move.

In the short term, SHIB could be targeting a 20% move after breaking through a key resistance level and completing a classic inverse head-and-shoulders pattern. As pointed out by pseudonymous trader Satori, this breakout confirms a bottoming structure, indicating further upside momentum if bullish volume continues.

SHIB's price has moved above the 25 and 50-day moving averages, which are the first major signs of a reversal since February's downtrend.

The price found support near $0.0000123, which is now acting as a strong level. With SHIB moving past those short-term moving averages, it appears ready to challenge the 75-day EMA, which is around $0.00001575.

The Money Flow Index is also increasing but has not yet reached the overbought zone. The MFI tracks buying and selling pressure, and its upward movement suggests that buying pressure is exceeding bearish pressure, potentially pushing SHIB higher as long as the uptrend persists.

Derivatives data also supports the bullish momentum. Open interest has increased by over 26% to $160 million, indicating a rise in capital flowing into SHIB futures markets. Simultaneously, its OI-weighted funding rate has turned positive.

Based on these positive indicators, SHIB's next potential target appears to be $0.00002485, which is around 65.7% above the current price level of $0.000015 and also marks its yearly high-to-date.

Disclosure: This article does not offer investment advice. The content and materials featured on this page are for educational purposes only.