Shiba Inu Burn Rate Surges 2061.22% Despite 3% Price Drop

On Tuesday, the burn rate of the popular meme cryptocurrency Shiba Inu (SHIB) surged by over 2000%, with approximately 20 million tokens permanently removed from circulation. This significant reduction in supply was aimed at decreasing the total circulating supply, which currently stands at 584.37 trillion tokens. Despite this massive burn rate increase, the price of SHIB continued to trade sideways, leaving investors and analysts with mixed views on its short-term direction.

According to data from Shibburn, the burn rate hit 2061.22% as 20.83 million SHIB tokens were sent to a null address, making them unrecoverable. This process is part of an ongoing effort to reduce the total circulating supply of SHIB tokens. However, the SHIB token was trading at around $0.00001193 at the time of reporting, down nearly 3% over the day despite the massive burn rate increase. The price dropped from an intraday high of $0.00001239, even reaching a bottom of $0.00001182 during the session.

The token has bounced approximately 16% from last week’s lows just above $0.000010, offering some relief to holders who have watched the price steadily decline since late 2024. Some analysts within the Shiba Inu community see positive signs on the horizon. A prominent SHIB trader known as @army_shiba posted on X: “$SHIB – New pump wave loading,” sharing a chart with an upward trajectory targeting the $0.00001400 level from the current price zone around $0.00001238.

Another analysis published on TradingView identified an inverted head and shoulders pattern on the SHIB/USD chart, which often signals a shift from decline to rally. The analyst suggested upside targets of $0.00001259 and $0.00001282 if the token breaks above the neckline with increased volume. Trading activity has picked up recently, with volume surging 28.14% to $181.9 million. This jump typically reflects renewed interest or positioning ahead of a potential price movement. Community sentiment appears to favor an upward move. CoinMarketCap’s user-based sentiment gauge—compiled from over 963,000 votes—showed 88% of participants expecting the Shiba Inu price to rise.

Not all analysts share the bullish outlook. Some chart experts point to concerning long-term signals that suggest SHIB could be headed for a substantial drop. The Shiba Inu price chart shows the token remains stuck in a downtrend since reaching highs around $0.000033 in late 2024. Throughout this year, SHIB has repeatedly failed to break through resistance at its 21 and 50-day moving averages. More worryingly, the price has formed what appears to be a descending triangle pattern over recent months, which often precedes bearish breakouts. Some analysts warn that a breakdown below support in the $0.000010 area could trigger a decline to 2023 lows around $0.000006, representing a 50% drop from current levels.

The meme coin market has been experiencing a deflation period, worsened by the launch of former US President Donald Trump’s official meme coin, which reportedly pulled liquidity from the space and left many investors at a loss. One expert going by “wallstreetbets” on X has claimed that “Despite burns, SHIB supply remains unchanged,” casting doubt on the effectiveness of the token burning strategy that many SHIB supporters believe will eventually drive prices higher. Broader market conditions may also play a role in SHIB’s future price action. While trade war fears have receded somewhat and Federal Reserve commentary has been supportive of market sentiment, uncertainty about a possible US recession remains high.

Recent economic data, including University of Michigan sentiment numbers, points to economic deterioration. If recession probabilities rise, financial markets could take another turn for the worse, with speculative assets like meme coins potentially being the first to feel the impact. For long-term investors willing to withstand high volatility, some analysts argue that any major price drop could present a buying opportunity. The current US administration’s pro-crypto stance and the potential for new market liquidity could eventually support a recovery in the broader crypto space, including for major meme coins like Shiba Inu. As SHIB hovers near key technical levels, traders are closely monitoring for a decisive move in either direction.