Shiba Inu (SHIB) Technical Reset as Token Burn Plans Counter Overbought Signals
Timothy Morano Jul 25, 2025 04:30
SHIB price retreats 4.27% to neutral RSI territory despite 200 trillion token burn announcement and July's impressive 30% surge breaking key resistance levels.
Quick Take
• SHIB currently trading with -4.27% decline in 24-hour period • Shiba Inu's RSI has cooled from overbought 78 levels to neutral 47.13 zone • Massive 200 trillion SHIB token burn announcement could reshape supply dynamics
What's Driving Shiba Inu Price Today?
The most significant development this week is the announcement of a planned 200 trillion SHIB token burn, representing one of the largest supply reduction initiatives in the project's history. This development comes as SHIB price experiences a technical pullback after reaching overbought conditions following July's remarkable 30% surge.
Recent market action reflects a natural cooling period after Shiba Inu broke its 2025 descending trendline on July 19, which had previously acted as a major technical barrier. The breakout was initially fueled by AI integration initiatives and increased token burn rates, creating significant bullish momentum that pushed SHIB's RSI to 78 - well into overbought territory.
The current 4.27% daily decline appears to be a healthy correction rather than a trend reversal, as whale accumulation patterns and fundamental developments continue to support the broader bullish narrative. The timing of the 200 trillion token burn announcement during this pullback could provide renewed upward momentum once the technical reset completes.
SHIB Technical Analysis: Neutral Signals Emerge After Overbought Reset
Shiba Inu technical analysis reveals a significant shift from last week's extreme overbought conditions. SHIB's RSI has retreated from 78 to a more sustainable 47.13, positioning the token in neutral territory that typically precedes the next directional move.
The SHIB MACD histogram shows -0.0000, indicating slight bearish momentum in the short term. However, this bearish signal should be viewed within the context of the recent 30% monthly gain and the natural cooling process following such strong moves. Shiba Inu's Stochastic indicators paint a similar picture, with %K at 14.60 and %D at 27.99, suggesting the token may be approaching oversold conditions that could attract buyers.
Shiba Inu's Bollinger Bands position at 0.4036 indicates SHIB price is trading in the lower half of its recent range, providing potential upside room for movement. The daily ATR suggests maintained volatility levels, creating opportunities for active traders while the broader trend structure remains intact.
Shiba Inu Price Levels: Key Support and Resistance
Based on Binance spot market data, Shiba Inu support levels are becoming increasingly critical as the token navigates this technical pullback. The immediate support zone represents the first line of defense for bullish traders, while stronger support levels below provide additional safety nets for long-term holders.
SHIB resistance levels remain well-defined from the recent surge, with immediate resistance marking the first hurdle for any renewed upward movement. Breaking back above this level would signal that the correction has concluded and that Shiba Inu is ready for the next leg higher toward analysts' $0.000017 target.
The pivot point serves as a crucial battleground between bulls and bears, with price action around this level likely to determine the short-term direction. Traders should monitor volume patterns around these key levels, as increased volume would confirm the validity of any breakout or breakdown attempts.
Should You Buy SHIB Now? Risk-Reward Analysis
For swing traders, the current SHIB price action presents an intriguing risk-reward setup. The pullback from overbought levels has created a more favorable entry point, especially with the 200 trillion token burn providing a fundamental catalyst. However, traders should wait for SHIB's RSI to show signs of bottoming before establishing positions.
Conservative investors might prefer to wait for confirmation that Shiba Inu support levels are holding before committing capital. The recent 30% surge demonstrates SHIB's explosive potential, but the current technical reset suggests patience could be rewarded with better entry prices.
Active traders can consider dollar-cost averaging approaches, taking partial positions as SHIB approaches key support zones while maintaining stop-losses below critical technical levels. The upcoming token burn event creates a binary catalyst that could drive significant price movement in either direction, making risk management essential.
Day traders should focus on the SHIB/USDT pair's reaction to support and resistance levels, using the neutral RSI reading as a baseline for momentum plays. The current technical setup favors those who can capitalize on volatility rather than those seeking immediate directional moves.
Conclusion
Shiba Inu's current technical reset represents a healthy consolidation after July's impressive 30% surge, with SHIB price finding equilibrium in neutral RSI territory. The announced 200 trillion token burn provides a significant fundamental catalyst that could drive the next major move, while technical indicators suggest the worst of the pullback may be complete. Traders should monitor how SHIB responds to key support levels over the next 24-48 hours, as this will likely determine whether the bullish momentum resumes or if further consolidation is needed.
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