Shiba Inu Price Watch: Falling Exchange Reserves Fuel Speculation

Shiba Inu burns surged, reducing supply and attracting investor attention.

Exchange reserves fell, indicating holders are not selling during price dips.

Technical charts show caution, with key support at $0.0000085 and resistance at $0.000010.

Shiba Inu is back in the spotlight as traders eye recent token burns and dwindling exchange reserves. SHIB traded around $0.0000090, slightly above the critical support at $0.00000853. Despite a 65% drop from this year’s peak, market participants remain alert. Massive burns and declining exchange holdings have sparked renewed interest, raising questions about whether Shiba Inu could rebound or slide further in the weeks ahead.

Token Burns Drive Attention

Shiba Inu has seen a surge in burn activity, signaling potential long-term value support. Shiburn data shows a nearly 2,000% jump in burn rate last Saturday, with 4.14 million tokens removed from circulation. One user burned 2.14 million tokens, while another removed $1.97 million worth. Big burns have become a trend, with users incinerating 180 million tokens on Wednesday and 621 million a day earlier.

Crypto investors view the token burns as a positive development. They reduce circulating supply, lowering inflation and creating scarcity. While similar to stock buybacks, token burns only limit inflation rather than boosting earnings. The psychological effect still matters. Reduced supply often encourages holders to keep their tokens, potentially stabilizing price in volatile markets.

Another bullish indicator comes from falling exchange reserves. Currently, only 285 million tokens remain on exchanges, down from 295 million in August. This suggests investors are not rushing to sell during price dips. Fewer tokens on exchanges can tighten supply and support upward momentum if demand rises.

Technical Signals and Market Outlook

Shiba Inu’s technical setup paints a cautious picture. On the daily chart, the price declined from $0.00001756 in May to $0.0000090. The coin formed a descending triangle pattern, with the lower boundary around $0.00001020. SHIB traded below the 25-day and 50-day exponential moving averages, showing short-term weakness.

Support at $0.0000085 remains critical. A break below this level could trigger further losses, possibly toward $0.0000050. Conversely, moving above $0.000010 could reverse bearish sentiment and attract buyers seeking a rebound. Traders are closely watching these key levels to gauge the next move.

Shibarium improvements also offer potential upside. After a recent ShibaSwap exploit, total value locked on the network increased 124% in 30 days to over $1.8 million. These upgrades strengthen network credibility and may increase user participation. Growing activity could help maintain interest in SHIB despite overall market weakness.

In short, Shiba Inu presents a mixed picture. Token burns and shrinking exchange reserves create a foundation for optimism, while technical charts signal caution. Traders should monitor support at $0.0000085 and resistance at $0.000010 closely. Any decisive move could determine whether SHIB continues to decline or finds a renewed upward path.