Shiba Inu Technical Setup Signals Potential Upside as Supply Fundamentals Strengthen

The start of 2026 marked a turning point for Shiba Inu, with multiple market signals converging to create a bullish technical setup. Currently trading at depressed levels after a challenging 2025, the memecoin has accumulated a strong foundation that suggests potential for meaningful upside recovery in the coming weeks.

Golden Cross Formation – The Key Technical Signal

The most significant bullish indicator to monitor is the potential emergence of a golden cross pattern, where the 50-day exponential moving average (EMA) crosses above the 200-day EMA. While this technical milestone hasn’t yet materialized—the 50-day EMA currently remains positioned below its 200-day counterpart—price action is gradually trending in the favorable direction. Historical precedent suggests golden crosses represent reliable indicators of sustained upward momentum, particularly when they follow consolidation phases rather than explosive rallies.

For this pattern to manifest, Shiba Inu needs to break decisively through its descending wedge formation and establish support above the 820 level. Technical chart formations, including narrowing trading ranges and inverse head-and-shoulders patterns, point toward supply absorption and the building of a healthy base—the ideal conditions necessary for a golden cross to take shape. If momentum strengthens as projected, this technical setup could fully develop by late 2026, potentially launching a sustained uptrend.

Chain Data Reveals Major Supply Compression

Beyond the technical picture, on-chain fundamentals paint an equally compelling story. The daily burn rate for SHIB experienced an explosive surge exceeding 10,000% in recent activity, removing over 173 million tokens from the active supply in a single day. This aggressive supply reduction, combined with substantial withdrawal activity, has pulled more than 200 billion SHIB tokens out of centralized exchanges.

The current exchange supply now represents approximately 81 trillion tokens—roughly 14% of total circulating supply—a ratio that draws comparison to the scarcity dynamics observed in Bitcoin and Ethereum. This constrained supply environment amplifies bullish sentiment and creates conditions conducive to price appreciation.

Growing Holder Base Demonstrates Long-Term Conviction

Despite a difficult year, the Shiba Inu community continues expanding. The network added over 70,000 new wallet addresses within the past 12 months, bringing the total holder base to approximately 1.55 million active accounts. Long-term investors have shown consistent accumulation behavior, withdrawing 60 trillion SHIB from exchanges—a clear indication of conviction in the memecoin’s extended-term trajectory.

This combination of growing participation and sustained accumulation suggests that market participants remain positioned for an extended holding period rather than seeking quick exits.

Price Targets and Market Outlook for 2026

Momentum indicators, particularly the 12-hour stochastic Relative Strength Index (RSI), have begun rotating toward bullish territory. When combined with a robust support zone, diminishing exchange inventory, and ongoing holder accumulation, Shiba Inu appears positioned for near-term recovery in the weeks ahead.

Technical projections currently suggest the token could target approximately $0.0000085 by the end of January—representing approximately 25% upside from recent depressed levels. While short-term volatility remains an inherent characteristic of cryptocurrencies, the convergence of supportive technical conditions, accelerating burn mechanics, an expanding holder network, and the approaching golden cross setup collectively suggest a constructive outlook for Shiba Inu as 2026 progresses.

The combination of technical setup, supply-side improvements, and community growth creates a multi-dimensional framework suggesting potential opportunity, though investors should remain mindful of the inherent volatility and risks associated with cryptocurrency investments.

Disclaimer: This analysis is provided for educational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments carry substantial risk of loss. Please conduct your own due diligence before making any investment decisions.