The Shiba Inu (SHIB) price has been trading within a narrow range recently, driven by decreased activity from whales and a significant drop in its burn rate. As of now, SHIB is priced at $0.00001410, marking a 20% decline from its monthly high. This positions the cryptocurrency in what analysts describe as a local bear market.

Shiba Inu’s Current Market Performance

This decline has been attributed to weak demand in both the spot and futures markets. Over the past 24 hours, SHIB’s trading volume reached $200 million, which is considerably lower than other top meme coins such as Dogecoin (DOGE), Pepe (PEPE), and Bonk (BONK). For perspective, Dogecoin remains a leader in this category with significantly higher trading volume and open interest in the futures market.

Further data highlights a decline in SHIB’s futures open interest, which currently stands at $238 million. This figure is a drop from its monthly high of $272 million. In comparison, Pepe’s open interest surged to an all-time high of nearly $700 million, while Dogecoin reached an impressive $2.6 billion, showcasing the disparity in market activity.

Whale and Smart Money Activity

Whales and smart money investors have also reduced their SHIB holdings over the past few months. According to market data, smart money investors now hold 13.29 billion SHIB tokens as of May 29, down from 14.54 billion in April. Similarly, whale holdings have dropped to 96 billion coins, a decrease from the monthly high of 100 billion coins.

Decreasing Burn Rate

Shiba Inu’s burn rate, a metric closely followed by the community, has also seen a sharp decline. Over the past 24 hours, the burn rate dropped by 28% to 13.1 million tokens. The largest burn event this week occurred on Monday when a single user burned 23 million SHIB tokens. This falling burn rate has raised concerns among investors as it directly impacts the coin’s deflationary mechanism.

Potential for a Bullish Breakout

Despite the current bearish sentiment, technical analysis suggests that SHIB could be gearing up for a breakout. The price action has formed a bullish pennant pattern characterized by a vertical rally followed by a symmetrical triangle. This pattern typically indicates a potential upward breakout as the trendlines converge.

Additionally, the triangle section of the pennant forms part of a larger cup-and-handle pattern, which has a depth of approximately 40%. If this pattern plays out, SHIB could potentially rally toward $0.00002443, which represents the highest point reached in January. This would signify a 70% gain from current levels. However, a drop below the critical support level of $0.00001228 would invalidate this bullish outlook.

Key Takeaways for Investors

  • Shiba Inu’s trading volume and open interest are lagging behind other meme coins like Dogecoin and Pepe.
  • Whale and smart money holdings in SHIB have declined, indicating reduced confidence among large investors.
  • The burn rate has significantly slowed, which could impact the token’s deflationary appeal.
  • Technical patterns such as the bullish pennant and cup-and-handle suggest potential upside, but caution is warranted as a drop below $0.00001228 would negate this outlook.

Investors should monitor market trends closely and consider both technical and fundamental factors before making any decisions. Shiba Inu’s next price movement could provide insights into its medium-term trajectory, making it an important watch for cryptocurrency enthusiasts and traders alike.

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