Shiba Inu Coin Burn Rate Surges 4000% Despite 7% Price Drop

The Shiba Inu cryptocurrency has garnered significant attention due to a dramatic increase in its coin burn rate, with 9.5 million SHIB coins being permanently removed from circulation. This aggressive burn is intended to reduce supply and potentially boost demand, but the price of the altcoin has not shown a corresponding rise. Data indicates that most investors are still facing losses, reflecting a cautious investor sentiment.

According to Shibburn, this surge in the burn rate is one of the most significant daily performances in the Shiba Inu ecosystem’s strategy to curb supply. This process is designed to increase SHIB’s market value. However, investor caution prevails, with a large fraction of investors seeing financial disadvantages. Despite these challenges, there is hope among market players that such a strategy might serve as a catalyst for future price increases, especially given the ongoing reduction in supply.

The immediate aim for SHIB’s price is to surpass a technical resistance point marked by the 26-day exponential moving average (EMA) at $0.0000118. This level has historically been a formidable obstacle, dominated by sellers. A recent rally pushed the price close to this mark, and there is an anticipation of re-testing the $0.0000120 zone. The restoring of the Relative Strength Index (RSI) from oversold conditions could imply a possible reversal in trend. Breaking past the 26 EMA would affirm a shift towards a bullish outlook, suggesting stronger price activity ahead. Without successfully surpassing this threshold, SHIB might remain in a consolidation phase. Investors are closely monitoring the interaction of the coin burn strategy with key technical signals.

Shiba Inu, a popular meme coin, has recently made headlines with a significant increase in its coin burn rate. Over 410.74 trillion SHIB tokens have been permanently removed from circulation, accounting for 41% of its total supply. This massive burn is part of a broader strategy to reduce the overall supply of SHIB tokens, which could potentially drive up the price by creating scarcity. The burn rate for Shiba Inu tokens surged by an astonishing 4000% this week. This dramatic increase is aimed at tightening the supply, which could theoretically boost the SHIB price if demand remains constant. However, despite this substantial burn, the price of SHIB has not seen a proportional increase. The price of SHIB moved up by just 1% in the last 24 hours, while experiencing a 7% drawdown over the past 30 days. This muted reaction raises questions about the effectiveness of the burn strategy in the short term.

The total circulating supply of SHIB is approximately 589 trillion tokens, indicating that there is still a considerable amount of tokens in circulation. This large supply could dilute the impact of the burn on the price, especially if the market does not respond positively to the reduced supply. The hype around meme coins, including Shiba Inu, has been declining as the market shifts towards projects with more utility and real-world applications. The recent burn activity was driven by a significant move from a whale, who burned over 1.3 billion SHIB tokens in the last seven days. This move contributed to a daily token burn rate spike of over 4,000%. The burn rate has been volatile, with some days seeing a 4,063% increase, helped by a 13.15 million token burn. This rising burn rate is generally seen as bullish because it reduces the number of tokens in circulation, which could potentially support the price in the long term.

Despite the increased burn rate, the price of SHIB has shown mixed signals. While the burn activity surges, the price has dipped, and tokens have been steadily flowing out of exchanges, hinting at reduced sell pressure. This could be a positive sign for the long-term outlook of SHIB, as reduced sell pressure could support the price if demand increases. In summary, Shiba Inu's recent increase in coin burn rate is a strategic move to reduce the supply and potentially drive up the price. However, the short-term impact on the price has been limited, and the long-term effectiveness of this strategy remains to be seen. The market's shift towards utility-driven projects and the large circulating supply of SHIB tokens pose challenges for the coin's future performance.