Shiba Inu Burn Rate Soars, But Price Remains Unmoved

Retail Investors Drive Activity as Whale Interest Wanes

Despite a massive increase in token burning—a deflationary mechanism—Shiba Inu’s price has shown little response, signaling a shift in market dynamics and a growing reliance on retail participation. The cryptocurrency is navigating a complex landscape of network activity and investor sentiment.

Burn Rate Jumps Over 5700%

Over the past week, the Shiba Inu token burn rate experienced a dramatic surge of 5762.9%, with more than 26 million tokens permanently removed from circulation. This action, typically intended to boost scarcity and price, had a muted effect, with SHIB sliding 1.82% to $0.00001259.

Retail Engagement on the Rise

On-chain data reveals a notable increase in retail investor activity. The number of New Addresses grew by 19.83%, Active Addresses rose by 9.41%, and Zero Balance Addresses jumped by 29.38% over the last seven days. These figures suggest a renewed influx of users and increased engagement within the SHIB ecosystem.

Transaction Size Discrepancies

While smaller transactions—under $1—increased significantly by 238.46%, larger transactions experienced a substantial decline. Transactions between $1,000 and $10,000 fell by 66.52%, and those between $10,000 and $100,000 dropped by 74.56%. This indicates a growing dominance of retail traders, but without significant whale activity, upward price pressure remains limited.

Technical Analysis Points to Consolidation

Currently, SHIB is consolidating within a demand zone between $0.00001028 and $0.00001196, a range that has historically attracted buying interest. However, the price remains below a descending trendline, maintaining a bearish overall structure. The Relative Strength Index (RSI) stands at 41, indicating weak momentum without reaching oversold territory.

Shifting Market Flows

Recent market flow data suggests a change in investor sentiment. Exchange inflows increased by 26.43% over the past week, indicating some traders are depositing tokens, potentially for selling. However, outflows surged by a much larger 92.01%, nearly doubling the inflow rate. This substantial rise in withdrawals suggests that a significant number of holders prefer to self-custody their assets, often seen as a bullish sign of long-term confidence.

According to a recent report by Chainalysis, self-custody of cryptocurrency assets has increased by 30% globally in the last year, driven by concerns about centralized exchange security and regulatory uncertainty. (Chainalysis)

Funding Rates Show Cautious Optimism

Derivatives metrics reveal a slight tilt toward bullish positioning. SHIB’s Open Interest-Weighted Funding Rate turned slightly positive at 0.0048%, indicating a growing preference for long positions. However, the conviction remains low. The Liquidation Heatmap on OKX highlights key liquidity pressure between $0.0000132 and $0.0000133, where many short positions are vulnerable. A break above this range could trigger short liquidations and fuel upward momentum.

Looking Ahead

The combination of SHIB’s burn surge, rising address activity, and dominant outflows suggests growing investor conviction. However, the lack of whale participation and the persistent downtrend remain significant obstacles. Until SHIB breaks above the descending resistance and clears the $0.0000133 cluster, substantial upward movement may be limited. Nevertheless, the foundations for a potential recovery are forming, with retail momentum and reduced supply laying the groundwork for future gains.