Due to price wars, Shiba Inu's burn rate has significantly decreased.
Whale trading continues to impact SHIB's price, raising concerns about volatility and liquidity.
The burn rate of Shiba Inu [SHIB] has recently fluctuated, with a sharp decline of 90.69% in the past 24 hours.
While token burning is a deflationary mechanism aimed at reducing supply and increasing scarcity, its impact on SHIB's price has been limited so far.
As 2025 approaches, many are beginning to question whether the burn initiatives combined with whale activity can generate long-term value, or whether broader market conditions will continue to overshadow these efforts.
Understanding burn rate and SHIB's recent price trends
For context, the burn rate refers to the speed at which tokens permanently exit circulation, reducing the total supply. Theoretically, this mechanism would increase demand. However, recent data has raised concerns.
In the past 24 hours, 506,465 SHIB tokens have been burned, marking a significant decline of 90.69% from previous levels.
This significant decline indicates a sudden slowdown in burning activities, especially since just 10 hours ago, the burn volume increased by 578%.
Nonetheless, the weekly burn figures present a different picture, with 65.19 million SHIB tokens burned in the past week, reflecting a modest increase of 4.5% year-on-year.
This suggests that, despite a short-term decline in the burn rate, the community's efforts to reduce supply are ongoing.
Price action and market sentiment
Meanwhile, in terms of price, SHIB has struggled to maintain its November highs. At the time of writing, the memecoin is trading at $0.00002167.
Although there was a slight increase of 1.69% in the past day, overall market sentiment remains sluggish. The token's RSI decline indicates bearish momentum.
Additionally, OBV indicates demand stagnation, while a decrease in trading volume suggests a drop in retail participation.
Shiba Inu whale activity
It is noteworthy that whale trading has played an important role in shaping Shiba Inu's market activity.
AMBCrypto's analysis of Santiment data shows that whale activity surged significantly during key price increases in October and November 2024. This indicates a direct correlation between large trades and SHIB's momentum.
Source: Santiment
Interestingly, recent data shows that whale trading volume remains high. The number of trades over $100,000 stabilizes at around 938,000, highlighting the continued interest of wealthy investors.
The intensification of this activity has enhanced liquidity, but it has also increased volatility, as large sell-offs may hinder price recovery efforts.
When combined with the burn rate mechanism, whale activity acts like a double-edged sword—intensifying speculative price surges while exacerbating corrections.
This dynamic is still crucial for SHIB's short-term development trajectory heading into 2025.
Despite increased activity, whale trading and burn plans have not triggered significant price surges. Why? Because macroeconomic uncertainty continues to affect investor sentiment.
SHIB relies on burns and whale-driven liquidity, lacking a broader underlying utility, which limits its potential upside.
As we approach 2025, the token's trajectory will still be influenced by these dynamics.
To reverse the downward trend and achieve sustainable growth in the coming year, network building and adoption will be key.
