Ethereum News Today: SHIB's Burn Surge vs. Stagnant Ecosystem: Can Fire Ignite Value?

SHIB Price Faces Structural Headwinds Amid Surging Burn Rate, Analysts Split on Breakout Potential

Shiba Inu (SHIB) continues to navigate a precarious balance between bullish on-chain activity and fundamental challenges that cast doubt on its long-term viability. While a record-shattering 26,493% spike in token burns has ignited short-term optimism, structural issues including a lack of ecosystem utility and a stagnant Total Value Locked (TVL) on its layer-2 network remain critical barriers to meaningful price appreciation, according to a Benzinga report.

The token's recent price action has drawn attention to its consolidation within a key demand zone, with traders noting accumulation patterns that historically precede breakouts, as noted by Benzinga. EtherNasyonal, a prominent crypto trader, highlighted SHIB's "record-low momentum" as a potential setup for a rally, while Shib Knight emphasized its role as the leading meme coin on Ethereum. However, these technical narratives contrast sharply with on-chain data revealing a TVL below $1 million for Shibarium, according to a Yahoo Finance analysis.

The disconnect between token burns and ecosystem growth has become a focal point for analysts. According to Shibburn data, SHIB's burn rate surged to unprecedented levels, with over 7.7 million tokens incinerated in a single 24-hour period. This rapid deflationary pressure, driven by large-scale transactions, has increased scarcity and briefly lifted market sentiment. Yet experts caution that such activity alone cannot offset the token's fundamental weaknesses. "The sheer scale of SHIB's supply requires deflationary forces that the current ecosystem is failing to provide," one analyst noted, referencing the token's 589 trillion circulating supply, a point also raised in the Yahoo Finance analysis.

Structural challenges stem from SHIB's reliance on Shibarium, a layer-2 solution designed to drive token utility through decentralized applications (dApps). Despite ambitious goals, the platform's TVL has languished below $1 million since early October, a fraction of its theoretical potential. This underperformance has led critics to label SHIB's $0.0001 price target as "a dead-end road," given the mismatch between its deflationary mechanisms and actual adoption metrics, as detailed by Yahoo Finance. Meanwhile, capital is increasingly flowing to utility-driven sectors like AI compute and DePIN, further marginalizing meme coins in the broader crypto landscape.

Market participants remain divided on SHIB's near-term trajectory. On one hand, the surge in burns and Ethereum's rally have created a tailwind for SHIB, with some analysts drawing parallels to historical patterns where ETH's all-time highs coincide with meme coin outperformance, a trend previously covered by Benzinga. On the other, the lack of meaningful TVL growth and the token's "meme coin" stigma persist as headwinds. "SHIB is losing ground to projects that offer real-world value," an industry observer noted, pointing to the broader shift in Web3 toward utility over speculation.

The coming months will test whether SHIB can translate its deflationary momentum into sustainable ecosystem growth. While the burn rate spike has generated short-term optimism, analysts stress that without significant improvements in Shibarium's TVL and dApp adoption, the token remains structurally challenged. For now, traders are closely watching the $0.00001042 price level, with a decisive breakout potentially unlocking new liquidity—but also risking a swift reversal if fundamentals fail to align, as suggested by the Yahoo Finance analysis and earlier Benzinga coverage.

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