SHIB's Price Decline: Flow Analysis of Burns, Exchanges, and Derivatives

The core deflationary narrative for SHIB relies on token burns to create scarcity and support price. This mechanism saw a dramatic, one-off spike earlier this week, with the burn rate surging 500.68% over 24 hours as a single transaction sent 10,491,803 SHIB to dead wallets. This event temporarily reignited hopes that the community's voluntary burning could stem the coin's decline.

Yet the sheer scale of the circulating supply renders this spike as statistical noise. The total burned now stands at 410.75 trillion SHIB, but the circulating supply remains colossal at 585.41 trillion tokens. In other words, even after removing over 400 trillion tokens, the vast majority of the supply is still available for trading. This fundamental imbalance means the burn process, which occurs at the discretion of community members rather than through a systematic protocol, fails to meaningfully alter scarcity.

The mechanism has now stalled entirely. Burn activity has halted completely, with zero tokens burned over the past 24 hours. This pause coincided with renewed selling pressure, as large holders moved billions of tokens to exchanges. The recent price action confirms the burn's limited impact: despite the spike, SHIB's price fell 5.54% in that same period. The bottom line is that a single, large burn cannot counteract a massive, active circulating supply or sustained selling pressure.

Exchange and Whale Flows: Shifting from Panic to Accumulation

The immediate pressure on SHIB came from large-scale selling. A single whale moved 41 billion SHIB to an OKX hot wallet, a classic signal of potential liquidation that increased near-term selling pressure. This activity, combined with a 5.54% price drop and low volume, painted a picture of panic selling earlier this week. The market has now begun to shift. In the past 24 hours, a net outflow of 207 billion SHIB departed exchanges. This is a critical pivot: tokens are moving from trading platforms into private wallets, a pattern that typically signals traders are moving from selling to accumulation or longer-term holding. This outflow directly lessens the immediate supply available for trading.

This flow shift is a potential precursor to stabilization. While price action remains choppy and technically bearish, the decline in exchange reserves indicates that the worst of the selling pressure may be exhausting. Liquidity is being absorbed, which could pave the way for a period of consolidation and, eventually, a relief rally if buying interest holds.

Derivatives and Price Action: Testing Critical Support Levels

The sharp drop in open interest is the clearest signal of waning trader confidence. In the past 48 hours, SHIB's open interest fell sharply by over 8%, a move that typically indicates a reduction in speculative positioning and a market de-risking phase. This decline followed a 15% weekly drop and a $2.45 billion in liquidations, primarily from longs, as the price tested a key demand zone.

The immediate technical battleground is now defined by a critical support level. The price has bounced from a session low at $0.0000062, a level that marks the token's lowest point since late 2024. A sustained break below this zone would open a clear path to the next major demand area near $0.0000055. For now, the market is in a state of compression, with momentum indicators suggesting seller exhaustion but the overall trend still bearish.

Yet there are early signs of a potential shift. Despite the broader decline, open interest has begun to climb again, rising 7.04% to $78.16 million. This rebound signals that traders are starting to rebuild positions, likely betting on a stabilization or relief rally. The long/short ratio remains slightly bearish at 0.86, but the recovery in open interest shows the market is not capitulating. The outcome hinges on whether buying interest can now hold at these key support levels.