3 Bearish Signals for Shiba Inu as SHIB Loses Price Momentum

Summary

• SHIB’s value has declined due to reduced engagement on the Shibarium network and a drop in significant transaction volume.
• Conversely, the burn rate has increased by 3,600%, indicating a possible revival through enhanced scarcity.

A Setback for SHIB

The widely recognized meme coin Shiba Inu has shown strong performance lately, achieving a 40% price rise over two weeks. It hit a three-month peak of $0.00002038 on September 28, before slightly correcting since that point. Currently, it is valued at approximately $0.00001861 (according to CoinGecko), reflecting a 4% decrease for the day.

This latest decline aligns with the stagnation of the Shibarium layer-2 scaling solution. Analytics indicate that daily transactions across the network, alongside new accounts and contracts, have been on the decline since September 27.

Additionally, there’s been a downturn in large transaction volume (transactions exceeding $100,000). As reported by IntoTheBlock, this metric has dropped by over 50% in the last 24 hours, currently sitting below $40 million.

Furthermore, we should consider Net Network Growth, a momentum indicator reflecting the actual growth of the token’s network. This figure has decreased by 0.26% and is now in bearish territory.

A Positive Note

On a positive note, a key factor suggesting that SHIB’s price may rebound shortly is the Shiba Inu burn rate, which has exploded by roughly 3,600% over the past week, resulting in over 2 billion tokens sent to a null address.

The primary goal of this program is to diminish the overall circulating supply of SHIB, fostering scarcity and potentially boosting the value of the remaining tokens.

This approach is grounded in basic economic principles: when supply decreases while demand stays constant or increases, it can lead to an appreciation in the asset’s price.

Since the adoption of this mechanism, the SHIB team and community have eliminated over 410 trillion tokens, leaving approximately 583.5 trillion in circulation.

For further updates on the ecosystem, be sure to check our Shibarium news.