When Leverage Takes the Wheel: Understanding SHIB's Current Market Dynamics

The SHIB burn rate has slowed considerably, with approximately 410 trillion tokens already removed from circulation according to Shibburn records. While token burns were traditionally designed to tighten supply and support valuations, the absence of recent burning activity means this price catalyst has neutralized—at least for now. The real driver of movement today isn’t sentiment or social media buzz; instead, leverage positioning and forced liquidations are orchestrating price swings across the meme coin sector.

How Liquidation Levels Shape Short-Term Volatility

Data from CoinGlass reveals the precarious balance in SHIB’s current setup. Long traders face maximum liquidation pressure near $0.00777, while short positions become vulnerable closer to $0.0086. With SHIB hovering around $0.00816, the downside risk zone is uncomfortably tight. In thin-liquidity markets characteristic of meme coins, this creates a cascade effect—a modest 5% pullback alone could trigger mass liquidations of long positions, amplifying losses and accelerating downward momentum.

Technical Setup: Weakness Signals on Multiple Fronts

The weekly burn rate chart and broader price structure tell a concerning story. SHIB is trading near established long-term support levels, guided lower by a dominant downtrend line that’s held sway for months. Technical indicators paint a murky picture: RSI sits near oversold readings while MACD remains positioned below the zero line. Neither signal strength for an immediate recovery attempt.

Should support fail at current levels, technical analysis suggests approximately 20% of downside exists before primary demand zones emerge. This projection aligns suspiciously well with the $0.00777 liquidation cluster. Conversely, a bounce would first need to reclaim the marked resistance zone, with potential upside eventually testing the $0.0005 region—a much steeper climb requiring sustained conviction.

The takeaway: SHIB’s near-term trajectory hinges less on narrative or adoption metrics and more on whether leverage structures hold or unwind violently.