- SHIB’s burn rate has increased by 347%, significantly reducing its market supply.
- Technical analysis suggests a potential bullish trend for SHIB following a pattern breakout.
The world of memecoins is never dull, especially for enthusiasts and investors of Shiba Inu [SHIB], the cryptocurrency that has often been seen riding the waves of high volatility and community-driven initiatives since years ago.
Shiba Inu, the second-largest memecoin after Dogecoin, has experienced a steady upward trend so far. In the past week alone, SHIB’s value has increased by nearly 10%, and over the past month, it has surged by more than 15%.
However, in the last 24 hours, the memecoin has faced a minor setback, with its price dipping to $0.00002595.
This price pullback, while typical in volatile crypto markets, coincides with a significant uptick in Shiba Inu’s burn rate—a key indicator that may influence the coin’s valuation over time.
Unprecedented burn, unpredictable market
Shiba Inu, known for its vibrant community and speculative allure, witnessed a remarkable 347% increase in its burn rate on 31st May, as shown in data from Shibburn, a token burn tracker for Shiba Inu.
This surge is part of a broader community-led effort to reduce the circulating supply of SHIB, potentially driving up its price through artificial scarcity.
Source: Shibburn
Earlier today, roughly 9.74 million SHIB tokens were sent to dead wallets, permanently removing them from circulation. This aggressive burn was carried out across multiple transactions by the community, highlighting the coordinated effort to bolster the token’s market value.
Three wallet addresses played pivotal roles in this spike. One notable contributor executed two major transactions, sending a total of 4.91 million SHIB to a burn address.
Another participant added to the frenzy by transferring 1.5 million SHIB to a dead wallet. These activities underscore a robust community initiative focused on creating value through scarcity.
SHIB’s burn strategy
The implications of such aggressive burning are multifaceted. While immediate price fluctuations are typical—SHIB experienced a minor decline to $0.00002595 following the burns—the long-term outlook could be substantially different.
Burning tokens reduce the available supply, theoretically making the remaining tokens more valuable if demand remains steady or increases.
However, the strategy’s effectiveness heavily relies on continuous community participation and broader market conditions. The crypto market, known for its unpredictability, can influence SHIB’s price independently of internal tokenomics efforts like burning.
Moreover, the increase in burn rate could signal to potential investors a proactive community, which might be an attractive quality leading to increased buying pressure.
A massive surge ahead?
Amid these developments, broader market analytics suggest a nuanced picture. Data from Santiment indicates a steady decline in SHIB’s price volatility, which could suggest a maturing market or increasing institutional interest.
Source: Santiment
Notably, a continuous decline in volatility contradicts the typical characteristics of a memecoin, which thrives on rapid price changes and high trader engagement.
Furthermore, SHIB’s open interest has seen a notable decrease, hinting at reduced trading activity and possibly a cooling-off period in trader interest.
Source: Coinglass
Meanwhile Technical analysis of SHIB’s daily chart indicates a recent breakout above a descending triangle pattern, typically suggesting an impending retracement to the breakout point.
Currently, it appears this retracement has concluded, and SHIB’s chart is showing signs of stabilization. Notably, the latest daily chart candle is forming what looks like a doji—a sign of market indecision.
If this doji candle is followed by a bullish engulfing candle closing above the doji, SHIB could be poised for a significant upward surge.
Source: TradingView
Read Shiba Inu’s [SHIB] Price Prediction 2024-25
This analysis aligns with a recent report from AMBCrypto, which noted that prolonged consolidation within this price range could establish substantial liquidity pockets near or above $0.000035.
Such conditions are likely to set bullish targets for SHIB once market sentiment turns favorable.