The burn rate of Shiba Inu [SHIB] has experienced fluctuations recently, with a drastic 90.69% decrease in token burns observed within the past 24 hours.
While token burns serve as a deflationary tactic aimed at diminishing the supply and increasing scarcity, the impact on SHIB’s price has been relatively limited thus far.
As we move closer to 2025, there is a growing curiosity about whether the burn initiatives, in conjunction with whale activities, can generate enduring value or if broader market conditions will continue to outweigh these efforts.
Comprehending Burn Rate and Recent Price Movements of SHIB
Essentially, the burn rate refers to the speed at which tokens are permanently taken out of circulation, consequently decreasing the overall supply. This mechanism theoretically boosts demand. Nevertheless, recent data has raised some concerns.
In the last 24 hours, 506,465 SHIB tokens were burned, showcasing a notable 90.69% decline from previous levels.
This substantial drop indicates a sudden deceleration in burn activity, particularly following a remarkable 578% surge just 10 hours earlier.
Despite this, weekly burns tell a different tale, revealing a modest 4.5% uptick with 65.19 million SHIB tokens burned over the past week.
This suggests that the community’s endeavors to reduce the supply persist, even as the short-term burn rate dwindles.
Price Trends and Market Sentiments
Meanwhile, SHIB has encountered challenges in maintaining its peak prices from November. Presently, the memecoin is trading at $0.00002167.
Although there has been a minor 1.69% rise over the past day, broader market sentiment remains restrained. The falling RSI of the token indicates bearish momentum.
Additionally, the On-Balance Volume (OBV) displays stagnant demand, while reduced trading volumes suggest diminishing engagement from retail investors.
Whale Activity in Shiba Inu
It’s important to note that whale transactions have played a crucial role in influencing the market dynamics of Shiba Inu.
An analysis by CryptoCrypto of Santiment data uncovered a significant surge in whale activity during crucial price surges in October and November 2024, indicating a direct link between large-volume trades and SHIB’s momentum.
Interestingly, the latest data illustrates that whale transactions have remained elevated, hovering around 93.8K for transactions exceeding $100K, underscoring sustained interest from high-net-worth investors.
This increased activity bolsters liquidity but also introduces volatility, as substantial sell-offs could hamper price recovery attempts.
When combined with burn rate mechanisms, whale activity serves as a double-edged sword, intensifying speculative price spikes and magnifying corrections.
This interplay is crucial for SHIB’s short-term trajectory as we head into 2025.
Despite this heightened activity, neither whale transactions nor burn initiatives have sparked significant price surges. The reason being the persistent macroeconomic uncertainty that continues to impact investor sentiment.
SHIB’s dependency on burns and whale-led liquidity, in the absence of broader utility, limits its potential for significant upward movement.
Looking ahead to 2025, the direction of the token will be heavily influenced by these factors.
For SHIB to reverse its downward trend and foster sustainable growth in the upcoming year, advancements in network development and increased adoption are essential.