Shiba Inu burn rate spikes 6,223%: Can SHIB break resistance for a rally now?

• The bullish golden cross and RSI signal SHIB’s potential for a sustained uptrend.
• On-chain metrics and reduced exchange reserves highlight strong accumulation and growing confidence.

Shiba Inu [SHIB] has taken the spotlight with a dramatic 6,223% surge in its burn rate and an impressive price recovery. At press time, SHIB was trading at $0.00002521, reflecting a 1.25% decline over the past day.

Despite this slight pullback, SHIB is poised near a critical resistance level, supported by compelling technical indicators and strong on-chain activity. The pressing question is whether SHIB can break through and sustain its upward momentum.

Technical indicators align for SHIB’s bullish move

Shiba Inu’s daily chart reveals a golden cross formation, where the 50-day moving average has crossed above the 200-day moving average. This bullish signal often predicts prolonged upward momentum.

Currently, SHIB faces a crucial resistance level at $0.00002275, which previously acted as a major support. Breaking above this zone could open the path to SHIB testing $0.00004, a level unseen since its earlier highs.

Source: TradingView

The Relative Strength Index (RSI) currently stands at 66.26, signaling robust buying activity. While this reflects optimism, traders should be cautious, as RSI nearing overbought levels can indicate a potential correction.

However, if buyers maintain pressure, SHIB could sustain its rally and establish a stronger price foothold.

Source: TradingView

On-chain activity shows positive divergence

Shiba Inu’s on-chain data reveals a striking 50.91% positive price-DAA divergence. This metric highlights increasing network activity as SHIB’s price rises, a clear indicator of strengthened user engagement.

Historically, such divergences align with bullish price action, signaling growing investor confidence.

Source: Santiment

Additionally, exchange reserves for Shiba Inu have dropped by 0.46% in the last 24 hours, now sitting at 138.75 trillion tokens. This decline indicates reduced selling pressure, suggesting a strong accumulation phase.

Consequently, fewer tokens on exchanges enhance SHIB’s chances of a continued rally.

Source: CryptoQuant

Market sentiment reflects strong interest

The broader market sentiment toward Shiba Inu remains bullish, as evidenced by a 4.85% increase in open interest, now totaling $101.71 million. This surge in open interest highlights heightened speculative activity and increased confidence in SHIB’s upward potential.

Consequently, the convergence of bullish sentiment and technical strength sets the stage for a possible breakout.

Source: Coinglass

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Shiba Inu is primed for further gains, supported by its golden cross, reduced exchange reserves, and positive on-chain divergence. If SHIB decisively breaks above $0.00002275, the next target could be $0.00004.

However, traders should remain cautious as resistance levels and overbought RSI conditions might cause short-term hurdles. For now, Shiba Inu appears ready to sustain its upward momentum.