Shibarium has recently grabbed attention due to surpassing 8 million blocks, along with a notable increase in Total Value Locked (TVL).
As fans of Shiba Inu [SHIB] celebrate this achievement, analyzing the link between TVL, token burns, and price trends becomes crucial.
Can the spike in TVL drive further price recovery for SHIB, or is the burn rate not substantial enough to influence market sentiment?
Shibarium TVL Hits New Heights
The TVL of Shibarium has seen a significant rise, nearing $5 million, according to data from DeFiLlama. At present, the TVL stands at $4.72 million, marking its peak to date.
This surge reflects growing investor trust and the expansion of utility within the Shiba Inu ecosystem.
Traditionally, higher TVL has been linked to enhanced liquidity and network activity, which bodes well for token valuation.
By comparing the growth trajectory, the Shiba Inu Layer 2 (L2) surpassed previous records earlier this year, showcasing increased network adoption.
The increase in liquidity aligned with a rise in transaction volumes.
Moreover, an analysis of network data by CryptoCrypto highlighted a substantial surge in active accounts, climbing from 2,284 to 12,041—a growth of 427%.
This growth was propelled by new accounts entering the network, with the analysis revealing an increase from 104 to 5,083, reflecting a growth rate exceeding 4,000%.
Progress in Shiba Inu’s Burn Rate
The burn mechanism of Shiba Inu, a critical element of the ecosystem, aims to decrease token supply and boost scarcity. Data from Shibburn revealed that over 1 billion tokens were burned in the last month.
Additionally, in the past 24 hours, more than 171 million tokens were burned, marking a significant increase of over 4,000%.
Although the burn rate has shown gradual growth, it needs to align with SHIB’s circulating supply scale.
There existed an inverse relationship between token burns and market price, making the impact of the burn mechanism modest without additional factors like heightened demand or broader market momentum.
SHIB Price Trends
The price of SHIB has displayed resilience, rising over 7% in the last 24 hours to $0.00002726. The daily chart exhibited a bullish trend, supported by the MACD and RSI indicators.
At the time of writing, the RSI stood at 67, nearing the overbought region, suggesting a potential consolidation in the short run.
Moving averages indicated strong support around $0.00002009, with the 200-day MA serving as a crucial long-term resistance level. The Bollinger Bands indicated expanding volatility, aligning with the recent price upsurge.
Despite the favorable macro environment created by Shibarium’s TVL growth, price action indicated that SHIB still encountered significant resistance at $0.00003500, a level it must surpass to sustain its upward momentum.
The combination of Shibarium’s escalating TVL, Shiba Inu’s token burning activities, and market rebound portrayed a cautiously positive outlook for SHIB.
Nevertheless, the impact of burns on price remained constrained without significant catalysts driving demand.