Shiba Inu's downtrend intact as daily burn rate tanks by 63%
|Shiba inu (SHIB) remains locked in a downtrend despite recovering from overnight lows, as the sharp drop in the "daily burn" rate has dented deflation prospects.
The token has recovered to trade near $0.000012650 at the time of writing, having reached a low of $0.00001234 during the Asian hours. Still, the downtrend identified by trendlines connecting May 12 and May 23 highs and the low reached on May 17 remains intact.
SHIB's daily burn rate dropped by 63%, threatening to derail the progress toward deflationary tokenomics, while trading volume surged by 78%. The daily burn rate refers to the number of SHIB tokens permanently destroyed or removed from circulation each day.
Token burns are widely used to introduce a deflationary appeal to cryptocurrencies. A deflationary token is a cryptocurrency whose supply is designed to decrease over time, typically through mechanisms like token burning.
So, the slower burn rate presents a headwind for SHIB. Still, on-chain data signaled $0.000012 and $0.000013 as potential support zones.
Key on-chain and technical insights
- Despite the bearish trend, on-chain data reveals a significant concentration of tokens held by investors with a cost basis between $0.000012 and $0.000013, suggesting this may become a heavily defended price zone where trading volumes could spike dramatically.
- Over the past 24 hours, support emerged at around the 0.00001236 level, with strong buying volume, suggesting accumulation at lower levels.
- Volume spiked dramatically at 08:02 with over 14.9 billion in trading activity, confirming the bullish momentum that pushed prices to session highs.
- Price stabilization in the final hours indicates potential consolidation before the next directional move.
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