Shiba Inu (SHIB) Burn Rate Explodes Nearly 500% in a Day, But There Is a Catch

The popular meme coin has had a tough year so far, with its price collapsing by nearly 30% since January 1. At the same time, investor interest in the token has cooled significantly, which could weigh on any potential rebound. The resurgence of Shiba Inu’s burning mechanism is one of the few rays of hope, but it may not be as bullish as it appears at first glance. According to the X account Shibburn, the team and community have scorched almost 2.7 million SHIB in the past 24 hours, a 492% increase from the previous day. The burning program is a vital part of Shiba Inu’s ecosystem, designed to gradually reduce the token’s vast supply and potentially increase its value through scarcity. Nearly 2.7 million coins may sound impressive, yet the USD valuation of the stash is negligible at around $13. That said, far more aggressive burns will likely be needed to meaningfully affect SHIB’s supply dynamics. The team introduced the mechanism in 2022, and over 410.8 trillion tokens have already been sent to a null address, with Vitalik Buterin contributing a significant portion of that figure. Another factor that could help SHIB recover some of its losses is a potential uptick in Shibarium’s activity. Daily transactions processed on the layer-2 scaling solution have exploded by roughly 370% in the past 24 hours, reaching 7,300. Still, this is nowhere near the levels seen months ago and is unlikely to be a major bullish catalyst. There has been little commentary on SHIB lately, with Crypto With Gopal emerging as one of the few analysts to offer a forecast. The X user suggested the meme coin has printed a falling Wedge formation as the price consolidates near $0.00000502, while buyers look to defend support. The analyst said a breakout above the descending resistance could spark a bullish momentum shift, setting $0.0000060 as an upside target and identifying $0.0000047-$0.0000048 as a support zone. “SHIB bulls are watching for a breakout – meme coin momentum could return,” he concluded. Meanwhile, the amount of Shiba Inu stored on crypto exchanges remains relatively low at just north of 87 trillion coins, which supports the bullish perspective since it reduces immediate selling pressure. The post Shiba Inu (SHIB) Burn Rate Explodes Nearly 500% in a Day, But There Is a Catch appeared first on CryptoPotato.