- Shiba Inu experienced a 900% increase in its burn rate over 24 hours, yet its price continued to exhibit bearish trends.
- Despite the negative price action, Shibarium, Shiba Inu’s layer-2 solution, shows growing adoption with over 1.2 million wallets.
A Discrepancy in Token Economics
The Shiba Inu (SHIB) cryptocurrency has recently undergone a significant event in its token economy. According to SHIBBURN, a Twitter account tracking Shiba Inu’s burn rate, there has been a dramatic increase of more than 900% in the number of SHIB tokens burned within a 24-hour period. This substantial reduction in circulating supply ordinarily suggests a potential increase in token value due to scarcity. However, SHIB’s price has not responded with a corresponding rise, remaining in the red.
Market Response to SHIB Burn
Despite burning a total of 83,307,739 SHIB tokens across four transactions, the meme coin’s market price did not exhibit the typical response expected from such a significant burn. In the world of cryptocurrencies, token burning is often seen as a mechanism to reduce supply and potentially increase demand, thus driving up prices. However, SHIB‘s price action defied this expectation, as it was down by over 2% in the last 24 hours, trading at $0.000008195.
Analyzing SHIB’s Market Indicators
A deeper dive into SHIB’s metrics reveals several insights. The coin’s Market-Value-to-Realized-Value (MVRV) ratio, a measure of market sentiment, declined over the past week, indicating less profitability for holders. Additionally, its price volatility decreased, and negative sentiment around the token rose significantly. Interestingly, despite these bearish indicators, SHIB remains a favorite among Ethereum whale traders.
Shibarium’s Growth Amidst SHIB’s Price Stagnation
In contrast to SHIB’s price stagnation, Shibarium, Shiba Inu’s layer-2 scaling solution, is witnessing increased adoption. The total number of Shibarium wallets has reached 1.2 million, with over 4.2 million transactions and 1.8 million blocks processed. Notably, after a spike in transactions on November 23, Shibarium’s daily transaction graph has shown a decline.
This divergence between SHIB‘s token burn rate and its price, alongside the growing adoption of Shibarium, presents a complex picture for investors. While the burn rate surge typically signifies a bullish signal, the current market conditions and sentiment appear to have overridden this effect, keeping SHIB’s price action bearish for the time being. The developments in Shibarium, however, indicate a growing interest in Shiba Inu‘s broader ecosystem, which could have future implications for the token’s valuation and utility.