Shiba Inu Price Drops 55% Amid 57,000% Burn Rate Surge

Shiba Inu's price has plummeted to a critical support level this year, dropping to a low of $0.00001443, marking a 55% decrease from its peak this year and a 65% decline from last year's high. The recent surge in the burn rate of SHIB tokens has sparked interest in the cryptocurrency's future trajectory.

The burn rate of Shiba Inu tokens has seen a significant increase, jumping by over 57,000% in the last 24 hours. This surge was driven by a user who moved 1 billion tokens to a dead address, effectively removing them from circulation. The value of these burned tokens is estimated to be over $14,500 at the current price. This burn event follows another instance where a user incinerated 1 billion Shiba Inu coins, and another user burned over 2.1 million coins. These actions contribute to the overall reduction in the coin's inflation rate.

Historical data indicates that over 410 trillion Shiba Inu coins have been burned, reducing the number of tokens in circulation to approximately 584 million. This number is expected to continue decreasing in the coming years. However, despite these burns, the overall deflation impact is relatively modest when compared to Shiba Inu's market capitalization of over $7 billion.

Several potential catalysts could influence the future price of Shiba Inu. One significant factor is the potential economic recession in the United States, which could be triggered by Donald Trump’s tariffs. While a recession is generally unfavorable, historical data shows that risky assets tend to rebound after the initial downturn. The Federal Reserve often intervenes during such crises by cutting interest rates and implementing quantitative easing policies, which flood the market with money. Additionally, the federal government may provide financial support to key sectors, as seen during the 2008/9 financial crisis and the COVID-19 pandemic. These interventions typically draw investors into risky assets like cryptocurrencies and stocks, potentially benefiting Shiba Inu.

Another potential catalyst is Shibarium, Shiba Inu's layer-2 network. Shibarium has handled over 975 million transactions, with the number of accounts growing to over 245,000 and blocks rising to 10.15 million. Shibarium plays a crucial role in Shiba Inu's ecosystem by converting fees generated within the network into Shiba Inu tokens, which are then burned. Although Shibarium has not yet achieved significant success, there is potential for future growth and impact on the SHIB price.

Technical analysis of the SHIB price chart reveals a downward trend in recent weeks, with the price dropping from a high of $0.000035 to a low of $0.00001525. The coin has moved slightly below the 50-week Exponential Moving Average (EMA), indicating a bearish outlook. However, a megaphone chart pattern has formed, characterized by two ascending and broadening wedge patterns. This pattern is often seen as a bullish indicator in technical analysis, suggesting a potential strong bullish breakout in the coming weeks. The next key resistance level to watch is at $0.00003395, approximately 130% above the current price.