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Shiba Inu (SHIB) is gaining traction with significant whale inflows, aggressive token burns, and a promising falling wedge pattern signaling potential bullish momentum.
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Despite a surge in speculative trading and token velocity, network growth remains subdued, raising questions about the sustainability of SHIB’s recent rally.
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According to COINOTAG, “The smart contract upgrades and multi-gas token support have reignited investor interest, positioning SHIB for a possible breakout if on-chain activity aligns with market optimism.”
Shiba Inu’s recent whale inflows, token burns, and technical setup suggest bullish potential, but subdued network growth and high NVT ratio warrant cautious optimism.
Shiba Inu’s Whale Inflows and Token Burns Signal Renewed Investor Interest
Shiba Inu has experienced a dramatic increase in whale inflows, surging by over 6,300% following the Shibarium upgrade, which introduced multi-gas token support and enhanced smart contract functionality. This influx of large holders coincides with a spike in futures trading volume, particularly on Gate.io, where volumes surpassed $147 million. Such activity indicates renewed confidence from sophisticated investors, potentially setting the stage for a bullish phase.
Complementing this, token burns have accelerated sharply, with over 1.19 billion SHIB tokens burned in the past week—a 1,499% increase. The 24-hour burn rate also rose by 958%, reflecting heightened on-chain activity and increased token velocity. While this could be driven by speculative trading and arbitrage, sustained burn rates may enhance SHIB’s deflationary appeal and strengthen long-term holder sentiment.
Source: Santiment
Evaluating SHIB’s NVT Ratio Amidst Price and Volume Discrepancies
While SHIB’s price and token flow metrics show encouraging signs, the Network Value to Transactions (NVT) ratio has climbed to 1,194, the highest in several months. This elevated NVT suggests that SHIB’s market capitalization is outpacing its transactional volume, a classic indicator of potential overvaluation. Historically, such spikes have preceded market corrections or consolidation phases.
Therefore, despite growing speculative interest, the disparity between market cap and network utility calls for caution. Investors should monitor transactional throughput closely, as sustained divergence could undermine the token’s price stability.
Source: Santiment
Network Growth Decline Challenges SHIB’s Long-Term Sustainability
Despite the surge in whale activity and token burns, SHIB’s network growth has notably declined, with only 476 new addresses created recently. This stagnation in user adoption contrasts sharply with the heightened speculative interest and token velocity. Historically, sustainable price appreciation is supported by organic network expansion and increased wallet creation, which are currently lacking for SHIB.
This divergence raises concerns about the durability of SHIB’s rally. Without meaningful improvements in real-world usage and user engagement, the token’s momentum may be vulnerable to reversal once speculative enthusiasm wanes.
Source: Santiment
Technical Outlook: Falling Wedge Pattern Suggests Potential 27% Upside for SHIB
From a technical perspective, SHIB is currently trading within a falling wedge pattern, a formation typically associated with bullish reversals. The token has maintained strong support levels while accumulating below the resistance trendline, indicating potential for a breakout. If confirmed, this breakout could propel SHIB towards the $0.00001448 target, representing an approximate 27% upside from current levels.
However, the realization of this technical target depends heavily on sustained bullish momentum and improved on-chain fundamentals. Traders should watch for breakout confirmation signals before increasing exposure, as conflicting factors like weak network growth may temper enthusiasm.
Source: TradingView
Conclusion
Shiba Inu’s recent surge in whale inflows and token burns underscores growing bullish interest, supported by a favorable technical setup in the form of a falling wedge. However, the elevated NVT ratio and declining network growth highlight underlying fundamental risks that could temper the rally’s sustainability. Investors should remain vigilant, monitoring on-chain activity and breakout confirmations closely. If SHIB can align its transactional utility with market enthusiasm, a meaningful upside remains within reach, but cautious optimism is advised given the current mixed signals.
