Shiba Inu Burn Rate Drops: Can Its Price Rebound by 90%?

Shiba Inu (SHIB), the second-largest meme coin, has experienced a steep price decline amid a broader market sell-off, with its value falling to $0.000024, a 21% drop from its highest point this month. The dip comes as the coin’s burn rate also showed signs of slowing down, decreasing by 30% on November 26, according to Shiburn data. The decline in burn activity, now at 3.4 million coins burned on that day, has brought the total number of burned coins to approximately 410 trillion.

Shiba Inu’s Burn Mechanism

Shiba Inu’s burn process is mainly driven through Shibarium, its Layer-2 network, and ShibaSwap transaction fees. Despite Shiba Inu’s growing ecosystem, the daily fees on Shibarium have declined recently. On November 25, the network processed over 561 transactions, with daily fees amounting to 714 BONE (around $342). A portion of these fees is burned by converting them into SHIB. However, Shiba Inu’s burn rate is still expected to decrease in the coming years, as more coins are burned but with diminishing volume.

ShibaSwap, the decentralized exchange on Shibarium, holds over $23.2 million in assets, and with 40 active addresses, it generates annualized fees of around $2.4 million, although the burn rate is not as high as before.

Whale Activity and Profit-Taking

Another factor contributing to the decline in SHIB’s price is whale activity. On November 26, the largest whale transaction involved selling $4.8 million worth of SHIB, with two other large holders selling approximately $2.2 million and $1.8 million in tokens. This suggests that large holders are taking profits after the recent price rally.

Can SHIB Recover by 90%?

Despite the recent downturn, Shiba Inu could potentially rise by 90% and reach its year-to-date (YTD) high of $0.000045. Technical analysis reveals several bullish indicators that could support this recovery:

• Cup and Handle Pattern: On the daily chart, SHIB has formed a cup and handle pattern, which is typically a bullish formation. The upper boundary of the pattern is at $0.000029, and projections suggest that SHIB could rise to $0.000046, which represents a 94% increase from its current price.
• Bullish Pennant: SHIB has also formed a bullish pennant pattern, which is another indicator of a potential upward breakout as the price approaches the apex of the pattern.
• Golden Cross Pattern: The coin has recently experienced a golden cross, where the 50-day and 200-day moving averages intersect. This is traditionally considered a strong bullish signal, suggesting that the upward momentum remains intact, and SHIB could soon retest its YTD high.

While Shiba Inu faces short-term pressure due to declining burn rates and whale profit-taking, the bullish technical indicators suggest the potential for a significant recovery. If the coin breaks through key resistance levels, SHIB could rise by 90% and revisit its YTD high of $0.000045. The ongoing development of the Shiba Inu ecosystem, particularly the Shibarium network, could play a crucial role in maintaining long-term growth, even though the coin’s burn rate may continue to decrease in the near future.