Shiba Inu burn rate explodes: Is a SHIB rally brewing?

• SHIB’s burn rate increased by 347%, significantly reducing market supply.
• Technical analysis suggests a potential bullish trend for SHIB after the breakout of the pattern.

The memecoin world is never boring, especially for Shiba Inu enthusiasts and investors [SHIB]a cryptocurrency that has often been seen riding the waves of high volatility and community-driven initiatives since many years ago.

Shiba Inu, the second largest memecoin after Dogecoin, has seen a steady upward trend so far. In the past week alone, SHIB’s value has increased by almost 10%, and over the past month it has increased by more than 15%.

However, in the last 24 hours, memecoin has faced a minor setback, with its price dropping to $0.00002595.

This price pullback, while typical of volatile crypto markets, coincides with a significant increase in Shiba Inu’s burn rate — a key indicator that can affect the coin’s valuation over time.

Unprecedented burn, unpredictable market

The Shiba Inu, known for its lively community and speculative appeal, witnessed an incredible 347% burn rate increase on May 31, as shown in data by Shibburn, a token burn tracker for the Shiba Inu.

This increase is part of a broader community effort to reduce the circulating supply of SHIB, potentially raising its price through artificial scarcity.

Source: Shibburn

Earlier today, approximately 9.74 million SHIB tokens were sent to dead wallets, permanently removing them from circulation. This aggressive burning was carried out through multiple transactions by the community, highlighting a coordinated effort to raise the token’s market value.

Three wallet addresses played a key role in this jump. One significant contributor made two large transactions, sending a total of 4.91 million SHIB to the burned address.

Another participant added to the frenzy by transferring 1.5 million SHIB to a dead wallet. These activities highlight a strong community initiative aimed at creating value through scarcity.

SHIB’s burning strategy

The consequences of such aggressive burning are manifold. While the current price fluctuations are typical – SHIB saw a minor drop to $0.00002595 after the ignition – the long-term outlook could be much different.

Burning tokens reduces the available supply, theoretically making the remaining tokens more valuable if demand remains stable or increases.

However, the effectiveness of the strategy is highly dependent on continued community engagement and broader market conditions. The crypto market, known for its unpredictability, can affect the price of SHIB independently of internal tokenomics efforts such as burning.

Moreover, an increase in the burn rate could signal to potential investors a proactive community, which could be an attractive quality that leads to increased buying pressure.

A huge wave ahead?

Amid these developments, broader market analytics suggest a nuanced picture. Data from Santiment indicates a steady decline in SHIB price volatility, which could suggest a maturing market or increasing institutional interest.

Source: Sentiment

Notably, the continued decline in volatility contradicts the typical characteristics of memecoin, which thrives on rapid price changes and high trader engagement.

Furthermore, SHIBs open interest has seen a noticeable decline, hinting at reduced trading activity and a possible cooling off period in traders’ interest.

Source: Coinglass

Meanwhile, technical analysis of SHIB’s daily chart indicates a recent breakout above the descending triangle pattern, which usually suggests an impending return to the breakout point.

Currently, this pullback appears to be complete and SHIB’s chart is showing signs of stabilization. Namely, the last candle on the daily chart forms what looks like a doji—a sign of market indecision.

If this doji candle is followed by a bullish engulfing candle that closes above the doji, SHIB could be poised for a significant bounce to the upside.

Source: TradingView

Read Shiba Inu [SHIB] Price forecast 2024-25

This analysis is consistent with a recent AMBCrypto reportwho noted that extended consolidation within this price range could establish significant pockets of liquidity near or above $0.000035.

Such conditions are likely to set bullish targets for SHIB once market sentiment turns favorable.