Shiba Inu Burns Surge, Price Stalls: What’s Happening?

Shiba Inu (SHIB) is experiencing a surge in token burns, a process intended to reduce supply and potentially boost value. However, the second-largest meme cryptocurrency continues to trade under pressure, leaving investors puzzled.

Burning Tokens, Building Bullishness

The SHIB burn rate recently soared, reaching over 112,000%. This resulted in the transfer of over 116 million tokens to wallets designed to remove the coins permanently from circulation. This process is intended to create a deflationary effect, potentially increasing the asset’s value.

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“Over 527 trillion SHIB tokens are approaching profitability, while the burn rate exploded 112,839% with 116 million tokens removed from circulation,”

—CoinDesk’s AI, Insights

According to recent data, the total cryptocurrency market capitalization has fallen by over 10% in the last week, indicating a broader market downturn (CoinDesk, June 2024).

Ecosystem Strength Amid Downtrend

The SHIB ecosystem has also shown signs of strength, with record-breaking wallet growth, exceeding 1.5 million unique addresses. There have also been significant increases in Shibarium layer-2 transactions. Despite these positive indicators, the memecoin remains locked in a downtrend.

Technical analysis points to the formation of a double-bottom pattern, which may signal a 20% rally to $0.000016. Key resistance has been established at $0.0000122, with the narrow trading range suggesting a consolidation phase. The future price movement of SHIB will depend on whether it breaks through this resistance level.