Shiba Inu Price Forecast: SHIB bounces higher, eyes key resistance amid burn activity
|- Shiba Inu is up 6% on Friday, bouncing off toward a crucial resistance zone.
- The Shibburn tracker shows 4.27 million SHIB tokens burned over the last 24 hours, likely easing downside pressure in the near term.
- Derivatives data reflects risk-on sentiment among traders, anticipating further gains.
Shiba Inu (SHIB) extends gains nearly 6% at press time on Friday, after a Doji candle formation the previous day. Burning 4.27 million SHIB tokens over the last 24 hours eases overhead pressure on the meme coin, supporting the relief rally. The retail sentiment sees a quick bullish shift, boosting SHIB futures Open Interest.
SHIB burn boosts retail, whale demand
Shiba Inu has burned 4.27 million SHIB over the last 24 hours amid efforts to limit inflation and avoid reaching its maximum supply of 999 trillion. This reduction in the circulating supply eases downside pressure on the meme coin, amounting to 410 trillion SHIB tokens.
The derivatives market sentiment shows near-term risk appetite for SHIB aligning with the token burn-driven recovery. CoinGlass data shows that SHIB Open Interest (OI) is up 6.44% over the last 24 hours, reaching $55.69 million, indicating increased positional build-up. The long-to-short ratio was above 1 at 1.0251 on Friday, indicating more long positions are active in SHIB derivatives.
On the other hand, CryptoQuant data shows an increase in the average order size in the futures market, suggesting whale interest in the meme coin.
Technical outlook: Will Shiba Inu's recovery evolve into a breakout rally?
Shiba Inu is up 6% at the time of writing on Friday, extending trading above the $0.00000600 mark. The short-term recovery faces the overhead descending 50-day exponential moving average EMA at $0.00000624, close to a descending resistance line connecting the highs of February 14 and March 16.
The meme coin should secure a daily close above this resistance zone to further extend gains, potentially targeting the R1 pivot point near $0.00000700.
Momentum shows a shift in bullish bias as the selling pressure fades.
The Relative Strength Index (RSI) at 54 rises above the midline with further room on the upside before reaching the overbought zone. Meanwhile, the Moving Average Convergence Divergence (MACD) steadily approaches the zero line while maintaining an upward trend above its signal line. At the same time, the expansion of positive histograms reaffirms the rising bullish momentum.
Looking down, a bearish close to the day would likely extend the prevailing three-day decline and put Friday's low of $0.00000562 at risk. A decisive close below this low could test the February 6 low at $0.00000507.
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