A substantial increase of 254,078% in Shiba Inu’s token burn rate resulted in the elimination of 5.63 billion tokens within a day. Despite this significant burn, SHIB experienced only a modest 3.03% rise in its price, trading at $0.00001781 at the current time.
With this remarkable development, a crucial question arises – Will this recent surge in token burn finally lead to a sustained upward movement in price, or will it mirror previous short-lived gains?
How Did Previous Surges in Token Burn Impact SHIB’s Price?
Looking back at historical data, the impact of token burn events on Shiba Inu’s price has been varied. Even substantial surges in burn rates, like the 6,700% increase observed previously, have generally not resulted in a lasting price momentum.
For example, a recent burn of over 324 million tokens initially sparked optimism. However, the rally quickly faded as selling pressure took over. While such events occasionally led to temporary price gains, they typically failed to sustain a bullish trend for SHIB.
Analysis of SHIB’s Price Chart – What Insights Does the Price Action Provide?
An examination of SHIB’s price chart reveals relatively stagnant price action following the recent surge in token burn. The current trading price of SHIB stands around $0.00001776 with minor fluctuations throughout the day. The Bollinger Bands indicate low volatility, hinting at limited price movement.
Additionally, the Relative Strength Index (RSI) hovers around 52.5, signifying a neutral position – neither overbought nor oversold.
This neutral technical setup suggests that despite the increase in token burn, SHIB lacks the buying strength required to breach resistance levels or sustain a significant upward trend.
On-chain Signals – A Tentatively Positive Outlook
An analysis of SHIB’s on-chain data reveals a somewhat positive sentiment, with key metrics leaning slightly towards a bullish outlook. Metrics such as “In the Money” recording gains of 0.81%, concentration increasing by 0.06%, and large transactions rising by 2.84% indicate mild bullishness.
However, net network growth shows a slightly bearish trend at -0.23%, suggesting limited activity in new addresses. While there is cautious optimism based on these indicators, the lack of substantial network growth may impede SHIB’s ability to maintain any gains.
Market Sentiment – Open Interest Highlights Uncertainty
Market sentiment surrounding SHIB remains cautious, with a 4.38% rise in Open Interest, reaching $47.37 million. An increase in Open Interest often indicates heightened participation and potential future price volatility.
Nevertheless, the absence of a strong price movement alongside this uptick implies that traders are still uncertain about the direction of the market. This cautious stance aligns with historical patterns where previous spikes in token burn had a limited impact on price.
Could This Token Burn Initiate a Sustainable Rally for SHIB?
The recent surge in token burn for Shiba Inu demonstrates the community’s ongoing commitment to deflationary actions. However, past trends suggest that token burn events alone are unlikely to catalyze a lasting price rally for SHIB.
While a minor price increase and cautiously optimistic on-chain data offer some potential, the absence of robust buying pressure or broader market shifts might constrain the impact of this recent burn surge.