Following a drop of more than 20% in the previous week, Shiba Inu’s bearish trend seems to be losing its strength.
Approaching a crucial support level at $0.0000197, the meme-inspired token may be at a turning point in determining its future price movement.
Historically, a solid support level serves as a mental anchor, drawing in buyers and halting downward spirals.
Notably, Shiba Inu’s burn rate has seen a significant spike in the past 24 hours, as per data from Shibburn.
The burn rate of the token has skyrocketed by a staggering 612%, resulting in the removal of over 3,244,007 SHIB from circulation permanently.
While this increase alone may not cause an immediate price surge, the decrease in supply contributes to SHIB’s demand, potentially enhancing its long-term value in case of rising demand.
Decrease in Selling Pressure for SHIB
Aiding this positive outlook is the current trend of the long/short ratio for SHIB, which is tilted towards short positions at the moment. Despite prevailing bearish sentiment, there are signs of this trend easing, indicating a reduction in selling pressure.
The diminishing bearish momentum as Shiba Inu nears the critical support level at $0.0000197 could imply that sellers are losing momentum.
Nevertheless, the fading bearish trend does not ensure an immediate price recovery.
For SHIB to see a significant rebound, a combination of decreased selling pressure, increased token burns, and heightened demand must converge.
Can Token Burns Rescue Shiba Inu?
The sharp increase in the burn rate reflects the active effort of the SHIB community in combating the downward trend. Through token removal from circulation, these burns aim to slash the overall supply and elevate scarcity.
While a 612% rise in the burn rate is impressive, its impact on the price heavily relies on market demand and trading volume.
If Shiba Inu manages to uphold the support at $0.0000197, it could pave the way for consolidation or even a reversal. Failure to defend this level might lead to further declines.