Sharp Increase in Burn Rate
On July 3, the Shiba Inu ($SHIB ) coin experienced a dramatic surge in its burn rate, escalating by over 8500%. Despite a recent downtrend where SHIB fell from over $0.000022 to below $0.000017, this significant increase in the burn rate has raised hopes for a potential price rebound.
Shiba Inu Coin Burn Rate Reaches New Heights
According to Shibburn data, the Shiba Inu burn rate skyrocketed by 8596.57%, resulting in the destruction of 17.71 million SHIB tokens. This notable rise has drawn attention within the crypto community, especially due to the involvement of two prominent wallets.
The most substantial burn was carried out by the wallet 0x608..., known for its consistent participation in Shiba Inu burn activities, which incinerated 7.77 million SHIB tokens. Additionally, wallet 0xa2d... transferred 4.17 million SHIB tokens to a dead wallet, effectively removing them from circulation.
Several other community members also initiated smaller SHIB token burns. The purpose of burning Shiba Inu coins is to decrease the overall supply, thereby theoretically increasing scarcity and potentially enhancing the token’s value. With a significant amount of SHIB removed from the market in one day, there is growing speculation about a positive impact on SHIB's price.
Historical Impact of Burn Events
Historically, burn events have had varied effects on the price of SHIB. While reducing supply can potentially lead to price appreciation, the actual outcome depends on several factors, including market sentiment, overall demand, and broader crypto market conditions. In the short term, the news of such a high burn rate may generate positive sentiment and buying activity among SHIB investors, possibly leading to a price increase.
Potential SHIB Price Reversal?
The recent spike in the burn rate has sparked speculation about a possible price reversal. Recently, SHIB has found temporary support around $0.00001688. If this support holds, Shiba Inu could rebound to $0.00002129, representing a 28% increase from its current level. Conversely, if the price falls, it might find support at a lower level of $0.000012. It's important to note that $0.00002129 serves as a temporary resistance level.
As of now, the price of Shiba Inu is down by 1.17%, standing at $0.00001695 on Wednesday, July 3. The popular meme coin has a market cap of $9.99 billion. Conversely, the 24-hour trade volume for Shiba Inu surged by 4.18% to $182.27 million.
Technical Indicators
Currently, the SHIB price is trading below both the 50-day and 200-day Exponential Moving Averages (EMAs), indicating a bearish trend in both the short and long term. However, the SHIB Relative Strength Index (RSI) value is at 32, signaling that the meme crypto could soon enter the oversold territory. Historically, such situations have led to price increases in cryptocurrencies, including Bitcoin (BTC).