SHIB Burn Fails to Boost Price: What's Next for Shiba Inu?

SHIB Burn Fails to Spark Price Rally

A recent 20 million SHIB burn, reported by on-chain tracker Shibburn, has failed to significantly impact Shiba Inu's price. While this burn, executed by an anonymous whale, represents a 34.24% increase in the daily burn rate and is crucial to SHIB's deflationary tokenomics, the price remains volatile and down 60% from its post-election high of $0.00003340.

This begs the question: is the burn mechanism truly effective in driving sustainable upward momentum?

Analyzing the Ineffectiveness of SHIB Burns

While regular burns reduce the circulating supply by locking tokens in dead wallets, SHIB's colossal circulating supply of 589.25 trillion tokens presents a significant challenge. Even a substantial burn like the 40.45 million SHIB burned on February 23rd failed to prevent an 11% price dip the following day, mirroring Bitcoin's 4.5% drop. This highlights the influence of broader market conditions on SHIB's price.

Source: Shiba Burn Tracker

Beyond the Burn: Factors Affecting SHIB Price

SHIB's price action is significantly driven by factors beyond the circulating supply, including:

• Social media sentiment: Social volume has recently hit a three-month low, reflecting decreased market interest.
• Trading volume: Trading volume has plummeted from over $4 billion during the election period to just $311.44 million, suggesting a lack of market participation.

Source: Santiment

Conclusion: The Future of SHIB

The recent burn, while a component of SHIB's deflationary strategy, hasn't been enough to overcome the lack of social momentum and trading volume. Until these factors improve, SHIB's price is likely to remain under pressure. For projects seeking robust security and transparent development, consider Codeum’s services: smart contract audits, KYC verification, custom smart contract and DApp development, tokenomics and security consultation, and partnerships with launchpads and crypto agencies.