Shiba Inu price set for steeper crash as burn rate plunges
Shiba Inu's price has experienced a significant bearish trend, plunging nearly 50% from its yearly high and becoming one of the worst-performing tokens. Key factors include an 86% drop in its burn rate, a decline in whale holdings from 220 billion to 107 billion, and reduced network activities in Shibarium, with fewer than 400 active accounts. SHIB's demand has dropped in both futures and spot markets, with open interest hitting a multi-month low. Technical analysis shows SHIB breaking below key support levels, suggesting further downside potential with a target of $0.0000085 this year.
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Shiba Inu's Price Decline and Burn Rate Collapse
The Shiba Inu (SHIB) price experienced a strong bearish breakout this week due to multiple factors: an 86% plunge in the burn rate, continued selling by whales, and reduced activity on the Shibarium network. This marks the continuation of SHIB’s significant downtrend.
Year-to-Date Performance and Burn Rate Challenges
SHIB has dropped by almost 50% from its year-to-date high, making it one of the worst-performing tokens of the year. The fundamentals have deteriorated, including a significant reduction in the token burn rate. On Tuesday, the daily burn rate plunged 85% to 1.6 million tokens, indicating a slower removal of tokens from circulation.
Decline in Shibarium's Activity
Other parts of the Shiba Inu ecosystem, such as Shibarium, are also struggling. The network has seen a drastic slowdown, with new daily accounts dropping to fewer than 10 and fewer than 400 active accounts overall. Despite the creation of Shibarium and ShibaSwap to transform SHIB beyond being a meme coin, activities in these areas remain weak.
Whale Selling and Reduced Investor Interest
SHIB has also faced challenges due to reduced whale and smart money investor participation. Large holders, or whales, have cut their SHIB positions drastically—from 220 billion tokens on October 11 to 107 billion currently. Similarly, smart money investors have decreased their holdings by 23.5% over the past three months. SHIB’s demand in the futures and spot market has declined, with open interest in futures dropping to $67 million from its year-to-date high of over $600 million, reflecting reduced liquidity and leverage usage.
Bearish Price Technical Analysis
The technical analysis shows that SHIB’s price has broken below the lower side of a bearish pennant pattern, which formed after October 9. It has also fallen below the critical support level of $0.00001, the lower boundary of a descending triangle. Additionally, SHIB remains under its 50-day moving average, signaling continued bearish momentum. The next price target could be $0.0000085, its lowest level this year. A further decline below this level would suggest more downside potential.