Shiba Inu’s 14,575% hike – Good news for SHIB’s price or should traders beware?

• SHIB’s technical indicators highlighted positive momentum, but a bullish trend still needs confirmation
• Rising transactions and lower reserves supported SHIB, but MVRV hinted at possible profit-taking

Shiba Inu [SHIB] is in the news today after it saw a massive 14,575% hike in its burn rate, removing 279 million tokens from circulation. Consequently, this token burn has sparked a wave of positive sentiment, driving SHIB’s price up by 3.43% to $0.00001889 in the last 24 hours.

However, will this momentum fuel SHIB’s long-term growth?

SHIB technical analysis – Is the token poised for a rally?

The memecoin’s technical indicators revealed a cautiously optimistic outlook. The MACD recently crossed into positive territory, hinting at upward momentum. However, this early signal still lacked some strength, and further confirmation is needed before a clear bullish trend can be established. 

The RSI, at press time, was at 60.85, indicating that Shiba Inu is not yet overbought, with potential room for further price growth.

Therefore, these signals suggested that SHIB may continue to rise. However, investors should proceed carefully and watch for stronger indicators.

Source: TradingView

Rising transactions and active addresses – A bullish sign?

Additionally, SHIB’s growing network activity added to its bullish case. The total number of active addresses jumped by 37.93%, hitting 6,391 in the last 24 hours as per CryptoQuant data. Furthermore, the transaction count doubled, surging by 100% to 7,083. 

These metrics indicated heightened engagement and growing demand for the token. An increase in activity is often a sign of a healthier network. And, this can lead to sustained price appreciation.

However, for Shiba Inu to maintain its upward trajectory, the network must maintain its high activity levels. 

Source: CryptoQuant

Declining exchange reserves – What does it mean for SHIB?

Exchange reserves slightly fell by 0.04%, with figures for the same sitting at 138.61T tokens at press time. Generally, declining exchange reserves mean fewer tokens available for sale – A sign that holders may be accumulating, rather than selling. 

This trend could reduce selling pressure and support further price hikes. However, the minor change in reserves calls for cautious optimism and traders should monitor any significant shifts in this metric.

Source: CryptoQuant

SHIB’s MVRV ratio – Should investors be cautious?

Finally, the MVRV (Market Value to Realized Value) ratio had a value of13.17% at press time – A sign that the token may be somewhat overvalued. Consequently, this could mean that short-term holders are sitting on profits and may soon take profits. 

Now, although the MVRV’s uptick does not necessarily predict a price drop, it does highlight the potential for selling pressure. This could limit SHIB’s upside.

Source: Santiment

Read Shiba Inu’s [SHIB] Price Prediction 2024–2025

To put it simply, SHIB’s burn rate hike has generated excitement, but technical indicators pointed to the need for cautious optimism.

Although rising transactions and active addresses are promising signs, Shiba Inu’s slightly elevated MVRV ratio hinted that profit-taking could slow down its momentum.