Is Shiba Inu price at risk as the burn rate plummets?
Shiba Inu’s price has been flat this month, and its chart is sending mixed signals on what to expect.
Shiba Inu (SHIB), the biggest Ethereum (ETH) meme coin, was trading at $0.00001200 on June 9, a few points above the year-to-date low of $0.000010.
The token is facing several headwinds that could lead to further downside in the near term. First, demand has dried up, as evidenced by its daily trading volume, which stood at $140 million on Wednesday.Â
This figure is significantly lower than volumes for other meme coins, including Pepe (PEPE), Official Trump, Bonk (BONK), and Fartcoin. The low transaction volume is a sign that it has lost traction among users.
Second, Shiba Inu’s burn rate has collapsed in recent days. It fell by 98% to 11.19 million tokens, equivalent to just $143, a negligible amount for a project with a market capitalization of over $7 billion.
Third, Shibarium’s layer-2 network has struggled to gain adoption among developers and users. It hosts only 18 dApps and has a total value locked of $2.3 million, well below fast-growing layer-2s like Base, Unichain, and Arbitrum.
Additionally, there are signs that whales have capitulated. Nansen data shows that whale holdings have dropped to 33.8 billion tokens, down from a recent high of 34 billion. In many cases, whale accumulation provides a confidence boost for retail participants.
Finally, Shiba Inu’s futures open interest has declined sharply over the past few weeks. Open interest currently stands at $156 million, down from a year-to-date peak of nearly $600 million.
Shiba Inu price technical analysis
On the daily timeframe, the SHIB price remains below both the 50-day and 200-day Exponential Moving Averages, an indication of sustained bearish pressure.
More concerning is the formation of an inverse cup-and-handle pattern, which often precedes additional downside. The token is currently in the process of forming the handle portion of the setup.
Further weakness will be confirmed if SHIB breaks below the lower edge of the cup at $0.00001025. A move beneath that level could signal further losses, potentially pushing the price below $0.000010.
On a more optimistic note, the forming pattern could also resemble a double top with a neckline at $0.000017. A breakout above that level would indicate a strong bullish reversal for SHIB.
