Shibarium has recently grabbed attention as it surpassed the milestone of 8 million blocks, accompanied by a notable increase in Total Value Locked (TVL).
As enthusiasts of Shiba Inu [SHIB] rejoice over this achievement, the connection between TVL, token destruction, and price movements emerges as a crucial area for investigation.
Can the surge in TVL trigger further price recovery for SHIB, or is the rate of token burning insufficient to sway market sentiment?
Shibarium TVL Achieves New Heights
Shibarium’s TVL has witnessed a significant rise, nearing the $5 million mark, according to DeFiLlama data. At present, the TVL stands at $4.72 million, marking its highest point in history.
This uptick signifies growing investor trust and an expansion of utility within the Shiba Inu ecosystem.
Traditionally, an increased TVL is linked to enhanced liquidity and network activity, providing a positive environment for token valuation.
When comparing the growth trend, the Shiba Inu Layer 2 (L2) surpassed previous milestones earlier this year, indicating a higher level of network adoption.
The surge in liquidity coincided with a rise in transaction volumes.
Moreover, an analysis of the network data by CryptoCrypto revealed a significant surge in active accounts, climbing from 2,284 to 12,041—an impressive 427% increase.
This growth was primarily fueled by the rise in new accounts, with findings indicating an escalation from 104 to 5,083, representing a remarkable growth rate of over 4,000%.
Positive Developments in Shiba Inu’s Burn Rate
The token burn mechanism within the Shiba Inu ecosystem, aimed at reducing token supply and enhancing scarcity, has shown progress. Data from Shibburn indicated the destruction of over 1 billion tokens in the past month.
Furthermore, in the previous 24 hours, more than 171 million tokens were burned, signifying an increase of over 4,000%.
Despite the incremental growth in the burn rate, it needs to align with the scale of SHIB’s circulating supply.
Moreover, there existed an inverse relationship between token burns and market price, indicating that the impact of the burn mechanism would remain limited without additional factors such as heightened demand or broader market momentum.
Price Trends of SHIB
SHIB’s price has exhibited resilience, climbing by over 7% in the past 24 hours to reach $0.00002726. The daily chart displayed a bullish trend, supported by indicators like MACD and RSI.
At the time of writing, the RSI stood at 67, nearing the overbought territory, suggesting a likelihood of consolidation in the short term.
Moving averages indicated solid support at $0.00002009, with the 200-day MA serving as a significant long-term resistance level. The expanding volatility, as per the Bollinger Bands, aligns with the recent surge in prices.
While the growth in Shibarium’s TVL has created a favorable macro environment, the price action underscores that SHIB is still encountering notable resistance at $0.00003500, a level that must be breached to sustain its upward trajectory.
The confluence of Shibarium’s escalating TVL, Shiba Inu’s token burn procedures, and market rebound paints a cautiously optimistic outlook for SHIB.
However, the influence of token burns on price remains constrained in the absence of substantial catalysts from the demand side.