Key Takeaways:
- Shiba Inu token SHIB advanced 14% in the previous 24 hours.
- The four-hour chart paints a bearish picture, with a possible 50% price drop.
- Recently established SHIB burning mechanism could boost the price.
YEREVAN (CoinChapter.com) – Shiba Inu (SHIB) caught the Bitcoin-led recovery wave as it rose 14% intraday to $0.00001228 on May 30. However, the token risks a 50% price slash based on a bearish setup.
Descending triangle selloff ahead?
Shiba Inu has formed a bearish continuation setup, dubbed the “Descending Triangle,” on its four-hour chart. The pattern entails flat support and a descending resistance trendline that had capped the bullish attempts since mid-May.
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Moreover, the setup pinned the target price for SHIB at $0.0000055, or over 50% lower than the current value. As SHIB followed Bitcoin’s recovery, it managed to break the Triangle’s resistance on May 30. However, Shiba Inu bulls might not have time to celebrate, as the breakout appears to be a bull trap.
Also read: Shiba Inu carnage continues as SHIB plunges 80% from record high — what's next?
In detail, the trading volumes on the four-hour chart indicate lowering buying pressure, which typically leads to a decline. Moreover, the relative strength index (RSI) confirms the downside bias, as the indicator has crossed over to the overbought territory, which typically amounts to selloffs.
SHIB weekly price action underscores the target
If the bearish scenario plays out, Shiba Inu will likely retest the Triangle’s resistance as support and possibly fall back into the setup’s range. In that case, the initial price target of $0.0000055 would become relevant again.
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The meme coin’s weekly chart backed the mentioned price target’s significance. Should SHIB lose the support at 0.00001023 again, the 50% price drop would represent the next possible lifeline for the asset.
SHIB burning in full swing
Meanwhile, data from the tracking platform Shibburn shows that over 2.41 Billion SHIB tokens were burned in the past week with 236 separate transactions.
Moreover, the same source confirmed that Shiba Inu bulls took nearly 97 million tokens out of circulation in the previous 24 hours. In detail, the team behind SHIB created the ShibBurn portal after “deriving inspiration” from Ethereum creator Vitalik Buterin. The latter burnt a whopping $6.7 billion SHIB in mid-May 2021.
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As a result, On April 23, 2022, the developers behind the token launched a new coin-burning mechanism to let burners generate a “passive revenue stream.” The deflationary system creates a supply squeeze, which could boost SHIB’s price in the process.
