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SHIB burn rate increased by 1,900% – Why is the price still facing risks?
The burn rate of Shiba Inu (SHIB) has skyrocketed by over 1,900% in the past 24 hours, but the price of this memecoin continues to show signs of weakness.
Despite millions of tokens being removed from circulation, investor sentiment remains unstable. Notably, some technical indicators are showing the potential for SHIB prices to continue to fall further.
The SHIB burn rate is increasing significantly but does not improve market confidence
According to data from Shibburn, the Shiba Inu burn rate has surged by 1,900% in just 24 hours. Over 13.5 million tokens have been burned – marking one of the largest increases in a single day recently.
However, this burn event occurs right at a time when the overall market is showing signs of a bearish reversal and memecoins like SHIB are under greater pressure.
Although the burn rate in 24 hours has surged, data over the past 7 days presents a contrasting picture.
Notably, the number of tokens burned weekly has decreased by nearly 20%, with just over 552 million SHIB removed from circulation.
In fact, this decline indicates that the long-term momentum of the token burning process is weakening. This is also a limiting factor in creating a sustainable price increase effect for SHIB.
It is worth noting that despite the efforts to burn tokens, the price of SHIB continues to decline. At the time of writing, this memecoin is trading at $0.0000108, down 5% in the past 24 hours.
The market capitalization of SHIB has also decreased accordingly, now around $6.3 billion — reflecting the cautious sentiment that still envelops investors.
Clearly, the surge in the burning rate has not been strong enough to counteract the downward pressure from the overall market trend.
Shiba Inu's technical indicators show a bearish trend
Notably, the price of Shiba Inu is currently still trapped in a descending triangle pattern – a structure that often has negative implications, with subsequent peaks consistently lower and supported by a strong support level.
Currently, the price is below the important support zone around $0.0000111. If it cannot reclaim this level, analysts warn that the price could drop as much as 50%, to a new low around $0.0000054.
On the other hand, the Relative Strength Index (RSI) remains below the 40 threshold, reflecting continued selling pressure.
Meanwhile, the simple moving average (SMA) for 50 days is at 0.000013 dollars – significantly higher than the current price of SHIB, indicating that the downward trend still prevails.
The Market Value to Realized Value ratio (MVRV) has also sent out a death cross signal, indicating that many short-term holders are currently in a state of loss.
Moreover, these technical signals further reinforce the likelihood that the downtrend will continue, despite some short-term positive news such as a significant increase in the token burn rate.
The overall market pressure increases difficulties for SHIB
In addition to technical factors, macro sentiment in the crypto market is also unfavorable for Shiba Inu.
Memecoins like SHIB are among the hardest-hit assets in the recent correction, as investors gradually shift towards more stable assets.
The trading volume of SHIB in the last 24 hours reached approximately 127 million dollars – but this figure reflects market hesitation more than confidence.
Additionally, activity on Shibarium – the Layer 2 network of Shiba Inu has also decreased significantly. The total value locked (TVL) has dropped from its May peak of 3.14 million dollars to 1.89 million dollars – nearly 50% in just 6 weeks.
This indicates that interest in the expanding ecosystem of SHIB is weakening, which could negatively impact long-term prospects.
Although the SHIB burn rate is attracting attention, this has not yet translated into a significant price increase. With strong pressure from technical analysis and less favorable on-chain factors, the price of SHIB is currently under heavy pressure.
At this time, SHIB investors may need to temper their expectations until clearer signs of recovery emerge.
Minh Anh