Shiba Inu (SHIB) is nearing a breakout point that could lead to a 455% rally

A five-year low in SHIB’s exchange offer reinforces the bullish argument.

While the second meme coin has been stuck in a long downtrend for the past few months, some market watchers believe that the price could soon make an impressive comeback.

Some chain factors reinforce the above scenario, while the halted activity at Shibarium suggests that the bears will not give up easily.

SHIB to Skyrocket?

As of press time, meme coin is trading around $0.000005653, representing a 52% year-over-year decline. Its market capitalization has dropped to around $3.3 billion, placing it as the 31st largest cryptocurrency.

According to X user JAVON MARKS, SHIB looks like the breakout point of another Falling Wedge structure and may be poised for a significant jump. The analyst noted that the last move from such a formation came after a 455% rally in prices, raising the question of whether history would repeat itself.

Another market watcher that recently touched on the token is CRYPTO LEGEND. They believe that SHIB can emerge as one of the strongest performers in the coming season, with profits reaching 10x.

A possible sign of the upcoming rally is the constant decline of tokens on crypto exchanges. That number recently hit a five-year low of around 80.1 trillion, CryptoQuant data shows. The trend shows that investors are regularly moving from centralized platforms to self-funding, thus reducing the immediate selling pressure.

The Relative Strength Index of the Shiba Inu (RSI) should also be mentioned. The weekly technical analysis tool reached around 30, suggesting that the asset is nearing oversold territory and could recover. Conversely, ratios above 70 are interpreted as a precursor to a reversal.

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Further pain for cows?

Compared to optimistic forecasts, the burning mechanism of SHIB and the stagnation of Shibarium indicate the possibility of further weakness. The burn rate has been reduced by about 30% on a daily basis, resulting in less than 5 million tokens (a negligible USD value) being sent to the null address.

The program was adopted in 2022, and since then the team and the community have burned approximately 410.75 trillion coins, leaving approximately 585.47 trillion in circulation. The ultimate goal is to reduce the total supply of SHIB, thereby potentially increasing prices due to scarcity (if demand remains constant or increases).

Shibarium’s suspension progress is another factor in the decline. Launched in the summer of 2023, Shiba Inu’s layer-2 scale solution is designed to enhance the ecosystem by reducing fees, increasing speed and improving scalability.

However, the protocol was exploited last year, which seriously damaged investor confidence. Daily transactions, which were once in the millions, rose to hundreds after the incident.