Shiba Inu: Evaluating the Potential for a Rebound Amid Supply Shock

The Shiba Inu (SHIB) cryptocurrency is currently experiencing dynamics that suggest a potential price rebound due to a supply shock. As long-term burn rates increase and the supply shrinks, there is a growing interest from buyers at key demand zones. An analysis of exchange reserves, buyer behavior, and technical indicators provides insight into SHIB's movement and its potential for future gains.

Key Takeaways

Increased long-term burn rates, declining supply, and strong demands are strengthening SHIB’s supply-shock momentum.
The drop in exchange reserves and notable buyer pressure indicate that buyers are absorbing sell orders, supporting a potential trend reversal.
Shiba Inu’s burn data indicates significant volatility; however, the overall trend suggests a contraction in supply, increasing pressure on circulating tokens.
Despite recent fluctuations, SHIB is maintaining its demand zone, showing that buyers are quick to react to decreased supply, enhancing the likelihood of a significant shift in momentum.

Shiba Inu supply shock signals strengthen as buyers defend key support

Is Shiba Inu Ready for a Reversal?

Shiba Inu (SHIB) is actively defending the demand zone between 0.00000885 and 0.00000900, indicated by repeated reactions that highlight robust buyer interest. Currently, SHIB's price is near the upper boundary of a descending channel, positioning it close to a potential breakout. At this moment, the Relative Strength Index (RSI) is around 39, suggesting that bearish momentum is diminishing.

The indicator is beginning to form higher lows, reflecting a gradual shift towards bullish control. If it successfully moves towards the 50 level, it would further support this momentum change. The chart also reveals clear breakout targets for SHIB, notably at 0.00001029, 0.00001118, and eventually 0.00001301, if positive momentum continues.

Shiba Inu price action
Source: TradingView

Shiba Inu's Exchange Reserves Decline

As of the latest data, Shiba Inu's Exchange Reserve USD has decreased by 6.79%. This decline indicates that fewer SHIB tokens are available on exchanges for immediate sale, which is significant because falling reserves are often linked to reduced selling pressure and a healthier accumulation pattern. SHIB's price holding within its demand zone, even during market pullbacks, suggests that the dwindling supply on exchanges is helping to stabilize prices. This trend complements the supply-shock narrative highlighted by burning data. With fewer tokens available, sellers have less influence while buyers increasingly hold power, particularly when the price is near a multi-week support area.

SHIBA INU Exchange Reserve USD - All Exchanges (2)
Source: CryptoQuant

Is Buyer Strength Returning?

The Spot Taker CVD (Cumulative Volume Delta) is now signaling consistent buyer dominance, suggesting that market participants are actively absorbing sell orders during each retest of the demand zone. This behavior strengthens the bullish case because ongoing taker-buy pressure typically precedes shifts in momentum. There is also a correlation between this metric and early recovery signs in the RSI, alongside consistent reactions in the price chart's demand zone.

These elements indicate that traders are stepping confidently into SHIB during dips, helping to restrict downward movement. Furthermore, the CVD structure shows buyers exerting controlled pressure rather than sporadic actions, creating a stable environment for a potential breakout if trading volume increases around the channel's resistance.

SHIBA INU Spot Taker CVD (Cumulative Volume Delta, 90-day)
Source: CryptoQuant

In conclusion, Shiba Inu finds itself in a favorable technical position where rising taker-buy pressure, dwindling exchange reserves, strong demand support, and improving RSI dynamics come together to create a positive setup. Despite volatility in burn rates introducing some uncertainty, the overall trend favors a potential supply-shock scenario. These signals indicate that SHIB may soon exhibit strength, increasing the likelihood of a breakout above its descending channel in the near future.