SHIB Faces Critical Support: Will October Bring a Bullish Shift?
- Shiba Inu has burned over 8.8 million tokens in the past week, supporting a bullish outlook.
- A steady decline in SHIB’s exchange reserves signals reduced selling pressure in the market.
- “Uptober” trends and technical indicators suggest Shiba Inu could rally in the coming months.
Shiba Inu (SHIB) has burned more than 8.8 million tokens in the past seven days, according to data from Shib Burn. This move could help support a bullish price action for SHIB, especially as the token battles its recent downtrend. The regular token burns are part of SHIB’s deflationary model, helping to control the vast supply of tokens. This process is accomplished through transaction fees collected from trades.
In addition to the burns, the reserves of SHIB on exchanges have been reducing over time. This implies that the number of people taking tokens off central exchanges and either self-custodying them or staking them is rising.
Shiba Inu’s Exchange Reserves at Historic Low, Triggering Bullish Hopes
Analyst Crypto Zayn noted that the exchange reserves of SHIB are at their lowest since 2023. The existing supply is at 84.55 trillion tokens, and with depleting reserves, fewer tokens are being sold.
This change in reserves, according to Crypto Zayn, is usually an early sign of accumulation. As long-term holders continue to increase, fewer SHIB are in the market. This reduced selling pressure, combined with the supply shrinkage resulting from burns, may be laying the groundwork for the next rally.
Technically, SHIB trades below a downwards resistance trendline. Zayn is of the opinion that a strong break above this resistance could spark a wider relief rally and may potentially be the start of what many others in crypto say is “Uptober.” The upward surges have long haunted the month of October in crypto, and Shiba Inu has tended to do well.
Related: Shiba Inu’s First DAO Election Aims to Reshape SHIB’s Future
SHIB Price Tests Key Support, Eyes Potential Reversal
As of press time, SHIB is trading at $0.00001172, down by 0.57% over the past day. The price is now testing a major support level at $0.00001168. If that support plays out, it could form the base of a potential bounce. Or if the price falls below this level, there might be a deeper decline to $0.00001129 support area.
On the other hand, SHIB encounters its initial resistance at $0.00001269, so that is its near-term average level of resistance based on the daily time frame. The next resistance will be the 100-day moving average at $0.00001278 if the price continues to break above this level. There is another strong resistance between $0.00001295, 200-day MA, and it may require an even higher push to be broken.
The MACD indicator also appears to be slowing up the momentum for sell-side pressure. The MACD line is at -0.00000029, while the signal line is at -0.00000018. This indicates a bearish momentum, but the contracting red histogram bars and the narrow gap between them suggest that the selling momentum is weakening. This may be an indication that SHIB is preparing for the anticipated reversal.
SHIBA Inu’s recent token burn and a decline in exchange reserves suggest the potential for bullish momentum. The accumulation phase may be beginning as tokens move to self-custody and staking. While there are some headwinds, the positive market mood and historical trends of October put SHIB on the radar to be a coin worthy of watching during the month.
