During the recent SHIB price drop, the Shiba Inu destruction rate jumped by about 16,600% as a single wallet initiated a token burn of over $21 million, which could spark a rally due to a reduction in supply.
The Shiba Inu (SHIB) emoji coin, known for its canine mascot, has recently attracted widespread attention in the cryptocurrency market due to a sharp increase in its token burn rate. According to Shibburn, a platform that tracks SHIB token burns, the burn rate saw a staggering spike of nearly 16,600% on Tuesday, June 4. However, this spike occurred against the backdrop of a decline in SHIB’s price, which raised hopes for a potential rebound.
Shiba Inu Community Launches $21.5 Million SHIB Destruction Campaign
The surge in SHIB token destruction has fueled enthusiasm among traders and investors. It reduces the total supply of SHIB in circulation, potentially increasing its value. According to Shibburn, the destruction rate of SHIB tokens has risen by 16,593.83% in the past 24 hours.
During this period, the community destroyed a total of 21.5 million SHIB tokens in multiple transactions. In addition, one wallet address attracted attention as it became the largest contributor to the surge in Shiba Inu's destruction rate.
A well-known contributor with wallet address 0x498… transferred a total of 21.31 million SHIB tokens to a dead wallet in a single transaction. In addition, other Shiba Inu community members conducted multiple token burns, resulting in a higher burn rate.
As a result of these large transactions, the cumulative destruction of SHIB tokens has reached a staggering 410.72 trillion. The reduction in supply is a key factor that could push up the value of SHIB tokens. In addition, if demand remains stable or increases, it could lead to higher returns.
From an economics perspective, a decrease in supply while demand remains constant or increases generally leads to an increase in price. This principle applies to cryptocurrencies, including SHIB. Recent developments have sparked a wave of optimism in the Shiba Inu community.
SHIB price falls
Shiba Inu fell below the critical support level of $0.000024 today and is far from the key resistance level of $0.000025. As of the time of writing, the SHIB price fell by 3.30% to $0.00002392 on Tuesday, June 4. Meanwhile, the meme cryptocurrency has a market cap of $14.09 billion.
However, SHIB trading volume surged 42.35% to $659.67 million in the past 24 hours. Although the burning rate adds optimism to the market, a rebound in Shiba Inu price will only be seen if the meme coin manages to break through the $0.000025 level.
If SHIB price breaks above this level, it could reach $0.000030 or even $0.000050. Moreover, if the bullish momentum continues, Shiba Inu could reach the long-term target of $0.0001, which some critics believe is unattainable. However, derivatives data paints a different picture.
According to Coinglass, SHIB futures open interest fell 13.95% to $89.77 million, indicating waning interest among derivatives traders. In addition, Shiba Inu long liquidations surged to nearly $1 million without significant short liquidations, suggesting further price declines due to selling.
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