Shiba Inu Burn Rate Drops 90% - How Will This Affect SHIB Price in 2025

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The 90% drop in the burn rate of Shiba Inu (SHIB) may have significant implications for its future price movements, especially as we approach 2025. Here are several key factors that analyze the potential impact of this phenomenon on SHIB:

1. Decline in Burn Rate

The burn rate refers to the speed at which SHIB tokens are permanently destroyed, theoretically reducing the total supply, thereby increasing demand and driving up prices. However, recent data shows that SHIB's burn rate has sharply declined by 90.69% over the past 24 hours. Although there was a slight increase in burn volume over the past week, the sharp decline in the short term may negatively impact its price. The effectiveness of the burn mechanism is somewhat limited in the short term and can be affected by other factors such as market sentiment and whale activity.

2. Price Action and Market Sentiment

SHIB's price has significantly dropped compared to its peak in November 2023. Even with a recent slight increase (+1.69%), overall market sentiment remains sluggish, and technical indicators (such as the Relative Strength Index RSI and OBV) indicate a bearish trend. The decrease in trading volume suggests a decline in retail investor participation, which is unfavorable for SHIB's short-term price trajectory.

3. Impact of Whale Activity

Whale trading has a significant market impact on SHIB, especially during key moments of price increases. Data from Santiment shows that whale activity was directly correlated with SHIB's price increases in October and November 2024. Although whale activity remains high, with the number of trades over $100,000 stable at 938,000, this could also lead to increased volatility. Large-scale whale sell-offs could suppress efforts for price rebounds, making SHIB's price even more unpredictable.

4. Macroeconomic Uncertainty

Macroeconomic uncertainty continues to have a significant impact on the crypto market, particularly for memecoins like SHIB. Given that SHIB's fundamentals remain relatively weak, lacking widespread utility or use cases, its price volatility is more driven by speculative sentiment and market hype.

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