Shiba Inus path to $1: The truth behind the token burn strategy
- Shiba Inu (SHIB) displays strong bullish momentum amid wider market optimism.
- Massive token supply burn remains essential for SHIBs $1 dream.
- Heavy sell pressure looms near critical price levels, challenging further breakout.
Shiba Inu (SHIB) has surged with renewed vigor, building upon the positive sentiment sweeping across the broader cryptocurrency market. After a prolonged phase of consolidation marked by investor caution and subdued price action, SHIBs decisive breakout has reignited enthusiasm among both retail traders and institutional participants.
SHIB is now trading at $0.00001415. SHIB has registered a 1.37% advance over the last 24-hour duration, along with an impressive 21.42% trading volume increase to stand at $313.13 million, a crucial sign pointing to increased investor interest. For the last week, SHIBs worth increased by an impressive 16.21%, a sign of its effectiveness in riding out the bettering market conditions.
The activity rise indicates that there is a general improvement of confidence towards the token, which places Shiba Inu among the top performers of mid-cap cryptocurrencies. Analysts say the momentum is due to a change of sentiment within the crypto sector, where appetite for risk is gradually being regained. However, while the latest performance of SHIB is optimistic, market analysts warn that sustainability will largely depend on breaking major technical resistance levels within the short term.
Why is it hard for Shiba Inu to reach $1?
While sentiment remains optimistic, the possibility of Shiba Inu hitting the highly touted threshold of $1 is a very tall order. Such a jump would require an almost total destruction of SHIBs enormous supply. With its existing supply of 589.5 trillion tokens, to achieve the valuation of $1 without increasing the market capitalization would mean burning 99.9987% of its supply down to 7.77 billion tokens.
If the monthly burn rate of SHIB continues, around 15.64 billion tokens were burned last March alone, the community would be more than 3,100 years from achieving a corresponding reduction. While technically possible, the impracticability of such a timeline moderates expectation. Supply reduction strategy seeks artificially to create scarcity, yet the existing rate of burns poses a significant obstacle.
Shiba Inu faces key resistance level
While Shiba Inu enjoys a wave of bull sentiment, a major roadblock awaits. On-chain analysis from IntoTheBlock shows more than 22.7 trillion SHIB tokens hovering between $0.00001293 and $0.000015 across more than 49,000 accounts. Together, these so-called out-of-the-money holders are a potential sell wall of significant weight, with numerous owners presumably wanting to break even after they bought up higher.
The densest area of these tokens lies at approximately $0.000014, precariously close to SHIBs existing trading zone. To continue its upward direction, SHIB needs to break this resistance using adequate purchasing pressure. Otherwise, the market may witness another halt or retracement, which it also experienced at its previous rally attempts.
In the sessions to come, how well SHIB can absorb this supply excess will decide if the breakout will transform into a durable rally or will be just another temporary spurt.
Read more: https://www.tronweekly.com/shiba-inus-path-to-1-the-truth-behind-the-token/
Text source: TronWeekly
