Shiba Inu (SHIB) Price Drops 7%: Is a Further Pullback or Recovery Ahead?

Shiba Inu (SHIB) has experienced a significant decline, with its price plunging by 7% over the past day. This drop is part of a broader downturn in the cryptocurrency market, which saw the total market capitalization decrease by over $100 billion. Bitcoin (BTC) has fallen from a peak of $72,500 to around $69,000, while Ethereum (ETH) has dipped below $2,500.

Current SHIB Performance

As a result of this market trend, SHIB's market capitalization has fallen back to $10 billion. Other cryptocurrencies in the meme coin category, such as Dogecoin (DOGE), have also faced substantial losses, contributing to a negative sentiment around SHIB.

• The recent price action indicates a challenging environment for SHIB, with potential for further declines in the short term.

Factors Influencing SHIB's Price

Despite the recent downturn, two factors suggest a possible upward movement for SHIB:

• Increased Burn Rate: The burn rate for Shiba Inu has surged by an astonishing 252,900% in the last 24 hours, leading to over 5.6 billion tokens being sent to a null address. This activity is equivalent to approximately $100,000 worth of SHIB being removed from circulation, which could create scarcity and potentially enhance its price if demand remains steady.

• Shibarium Activity: The layer-2 scaling solution for Shiba Inu, known as Shibarium, has seen a resurgence in transactions, reaching almost 4 million on October 31—a 130% increase from the previous day. This increase in network activity signifies robust engagement, which could positively impact SHIB's price through enhanced utility and improved market sentiment.

Potential for a Bullish Rally

Analyst Clifton Fx has identified a bullish flag pattern on SHIB's three-day price chart. He speculates that if SHIB can reclaim the resistance level of $0.00001884, it could see a price rally of up to 90%.

• Currently, SHIB is trading at approximately $0.0000173, indicating it needs to rise by 9% to reach this target.

While Shiba Inu faces immediate challenges with its recent price drop, the increased burn rate and rising activity on Shibarium offer hope for a potential recovery. Traders and investors will be closely monitoring these developments to gauge the future direction of SHIB.