SHIB Price Struggles Amid Market Downturn
Shiba Inu, one of the most popular meme coins, has faced a challenging week, experiencing a price drop of nearly 5%. However, the coin has shown potential for a comeback, gaining 2% in the past 24 hours and now trading around $0.00001349. While these minor gains might seem insignificant, several underlying factors suggest SHIB could be gearing up for a rally.
1. Shiba Inu Burn Rate Sees a Significant Spike
One of the most promising indicators for SHIB’s potential rally is the increase in its token burn rate. Over the last 24 hours, Shiba Inu’s burn rate jumped by 35%, resulting in nearly 3 million tokens being permanently removed from circulation. While the burned tokens’ value in USD might be minor, this mechanism is designed to gradually reduce SHIB’s massive circulating supply. With demand holding steady, a continued reduction in supply could lead to upward price pressure, adhering to basic economic principles.
2. Shibarium’s Growth Accelerates
Another bullish sign for Shiba Inu is the growing activity on Shibarium, the Layer-2 blockchain developed to enhance SHIB’s ecosystem. Daily transactions on Shibarium have surged by 60%, reaching 5,600 on September 4. Shibarium is crucial for SHIB’s scalability and adoption, reducing transaction fees and improving transaction speed. Since its launch, the platform has processed over 400 million transactions, underscoring its role in the ecosystem’s expansion. The growing interest and utility of Shibarium for Shiba Inu could provide the foundation for a sustained SHIB price rally.
3. Large Holder Accumulation Increases
According to data from IntoTheBlock, there’s been a rise in large holders accumulating SHIB tokens. The concentration indicator, which tracks the buying or selling activity of major SHIB holders, is up by 0.03%. This shows that significant investors are adding to their SHIB positions, indicating confidence in the token’s future potential and further involvement with Shiba Inu.
Bearish Signals on the Horizon?
While these indicators hint at a bullish outlook for Shiba Inu, some metrics suggest caution. For instance, the Net Network Growth metric, which gauges the actual expansion of the Shiba Inu network, remains in negative territory, down 0.20%. This decline points to a slowdown in SHIB’s organic network growth.
Moreover, the “In the Money” indicator, which tracks SHIB holders currently in profit, is down by 0.42%. This suggests that more Shiba Inu investors are facing losses, with 52% of holders currently in the red. If these trends persist, they could hinder SHIB’s short-term price momentum.
Potential Rebound or Continued Slump?
Despite bearish indicators like sluggish network growth and increasing losses among investors, SHIB’s burn rate, Shibarium’s expansion, and large holder accumulation are bullish signals that may lead to a potential price recovery for Shiba Inu. However, traders should be mindful of the volatile nature of meme coins and keep a close eye on these key metrics.
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