TL;DR
- SHIB’s price dropped amid decreased activity on its Shibarium network and lower large transaction volume.
- On the other hand, the burn rate surged by 3,600%, suggesting potential resurgence through increased scarcity.
A Step Back for SHIB
The popular meme coin Shiba Inu has performed quite well recently, registering a 40% price increase on a two-week scale. It reached a three-month high of $0.00002038 on September 28 before slightly retracing since then. Currently, it trades at around $0.00001861 (per CoiGecko’s data), representing a 4% daily decline.
The latest retreat coincides with the stalled progress of the layer-2 scaling solution Shibarium. Data shows that daily transactions on the network, new accounts, and new contracts have been on a downtrend since September 27.
The next signal is the decline of large transaction volume (where each transaction exceeds $100,000). According to IntoTheBlock, the figure has fallen by over 50% in the past 24 hours and is currently less than $40 million.
Last but not least, we will focus on Net Network Growth, a momentum signal that “gives a pulse of the true growth of the token’s underlying network.” The metric is down 0.26% and is currently positioned in bearish territory.
One Bullish Factor
Conversely, one major element hinting that the price of SHIB might head north again in the near term is the Shiba Inu burn rate, which has skyrocketed by approximately 3,600% in the past week, resulting in over 2 billion tokens sent to a null address.
The program’s ultimate goal is to reduce the total circulating supply of SHIB, create scarcity, and potentially increase the value of the remaining tokens.
This strategy relies on the basic economic principle that when the supply decreases while demand remains steady or rises, it can result in an increase in the asset’s price.
Since the adoption of the mechanism, the SHIB team and community have destroyed over 410 trillion tokens, leaving roughly 583.5 in circulation.
For more updates on the ecosystem, check out our Shibarium news.
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