Shiba Inu (SHIB) is igniting excitement in the crypto community with a remarkable 941% increase in weekly token burns. Over the past week, a staggering 322,982,323 SHIB tokens, valued at approximately $5,933.50, were sent to blockchain null addresses in an effort to reduce the token supply. However, despite this burning frenzy, SHIB’s price remains stubbornly stagnant, prompting questions about the effectiveness of the burn strategy.
Shiba Inu’s Burn Rate – A Hot Streak
The last 24 hours alone saw six million tokens consumed in the burning process, sustaining a hot streak that has captured the attention of traders and investors alike. Yet, while SHIB’s burn efforts ramp up, the price struggles to maintain its position above the crucial support level of $0.000018. Currently, 54% of custodians are reaping profits within this range, but the outlook is precarious. If the burn initiatives fail to provide a significant boost, there is a risk of a full retracement of September’s bull run, which saw prices rise to $0.00002135.
Notably, Shiba Inu’s burn rates heavily rely on the Shibarium Layer-2 network, SHIB’s native blockchain. This platform has become instrumental in the ongoing token-burning strategy. A considerable portion of the transaction fees collected in the gas token Bone ShibaSwap (BONE), which has a cap of 250 million tokens, is frequently converted back to SHIB and incinerated. This approach aims to gradually diminish Shiba Inu’s supply, fostering a more favorable environment for price appreciation.
Price Dynamics and Market Activity
The dynamics of SHIB’s price are intricately linked to trading activity on the Shibarium Layer-2 network. An increase in trading volume could be pivotal for SHIB to reclaim its monthly high of $0.00002136. On October 19, 2024, ShibariumScan reported an impressive 242,890 daily transactions, mirroring a similar figure the following day. This spike is particularly noteworthy given that most days in October have recorded fewer than 10,000 transactions, suggesting a significant uptick in interest and activity.
However, the price range between $0.000018 and $0.00002 is crucial for SHIB, as it currently hosts the most active addresses. Sell-offs within this territory could exert downward pressure on Shiba Inu’s market value. As of now, SHIB is trading at $0.0000182, reflecting a 3% decline in the past 24 hours.
As Shiba Inu continues to implement an aggressive token-burning strategy, the disparity between increasing burn rates and stagnant prices raises important questions about the effectiveness of such measures. While the Shibarium Layer-2 network enhances trading activity, traders and investors remain cautious. The next steps for SHIB will be critical in determining whether this burning ambition can translate into significant price movements. Only time will tell if the SHIB Army’s fervor for token burns can catalyze a shift in market dynamics and elevate Shiba Inu to new heights.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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