SHIB Faces Pressure as Daily Burn Rate Plunges 63%, Undermining Deflationary Outlook
Shiba Inu (SHIB) continues to trade under bearish conditions despite a modest recovery from overnight lows, as its daily token burn rate dropped by 63%, raising concerns about the token’s long-term deflationary trajectory, according to CoinDesk AI Insights.
At the time of writing, SHIB has climbed back to $0.000012650, after dipping to $0.00001234 during early Asian trading hours. However, the broader downtrend—marked by resistance from highs on May 12 and May 23, and the low set on May 17—remains unbroken.
The plunge in the burn rate—defined as the number of SHIB tokens permanently removed from circulation each day—poses a setback to Shiba Inu’s deflationary tokenomics, even as trading volume surged 78% in the same period.
Why It Matters:
Token burns are a key mechanism used by crypto projects to create scarcity and reduce total supply over time. A sustained decrease in the burn rate may reduce long-term investor confidence in SHIB’s deflationary narrative, especially amid broader market softness.
Key Technical and On-Chain Takeaways:
- Support Zones: On-chain data highlights a cluster of SHIB holders with cost bases between $0.000012 and $0.000013, suggesting these levels could act as strong support zones amid increasing accumulation.
- Short-Term Buying Activity: Notable buying volume emerged around $0.00001236, indicating dip-buying behavior and a possible accumulation phase at lower levels.
- Volume Spike: At 08:02 UTC, SHIB recorded a sharp spike in volume, with over 14.9 billion tokens traded, fueling a brief rally to intraday highs.
- Consolidation Signs: Price action in the latter part of the session pointed to stabilization, hinting at a possible consolidation range ahead of a larger directional move.
While SHIB’s burn mechanism has been one of its key long-term value drivers, the recent slowdown highlights the importance of maintaining consistent tokenomics support—especially during broader market uncertainty.
