SHIB Plummets in Value Despite Burning Over 13 Billion Coins in a Day

SHIB Plummets in Value Despite Burning Over 13 Billion Coins in a Day

Shiba Inu (SHIB) suffered a significant decline in price over the past 24 hours despite developers burning over 13 billion tokens through an unprecedented burn initiative. Let's take a deeper look at what happened.

The Massive Burn

Developers behind the popular meme coin Shiba Inu burned a mammoth amount of tokens in two separate transactions totaling over 13 billion SHIB coins. The first burn destroyed 9.6 billion SHIB tokens worth around $332,000 at the time. Shortly after, another 3.8 million SHIB tokens were burned, bringing the total value of coins removed from circulation to around $463,000.

In addition to SHIB, developers also burned small amounts of other Shiba Inu ecosystem tokens. This included burning 28 LEASH tokens worth $21,600 and 19,551 BONE tokens worth around $22,874. The burns aimed to reduce the total supply of SHIB and supporting tokens in what was described as an “unprecedented surge” by the Shiba Inu burn rate. In the 24 hour period, the overall burn rate for SHIB increased by an enormous 23,133% compared to normal levels.

Price Decline Despite Burns

Surprisingly, despite such a significant reduction in circulating supply through the massive burn, the price of SHIB declined over the same time period. Data shows the coin lost over 7% of its value, dropping from around $0.000042 to $0.000039. This is notably against expectations, as most would assume reducing supply through token burns would positively impact price.

So what happened? There are a few potential factors that may have contributed to SHIB's price decrease despite the burn activity:

Wider Market Conditions

The entire cryptocurrency market suffered losses over the past 24 hours. Many top coins like Bitcoin and Ethereum were down 5-10% which could have dragged SHIB's price down with the broader market decline. Sentiment was negative across crypto traders.

Burn News Already Priced In

Regular burns have been a part of Shiba Inu's strategy for a while now. The burn activity may have already been anticipated and priced into SHIB to some degree. Investors were not significantly surprised by another burn.

Whale Activities

Some large whales, or holders of major SHIB bags, could have taken profits or rebalanced their portfolios. Even a small sell-off from major wallets can pressure the price. Whale movements often have an outsized impact on smaller market cap altcoins.

Consolidation Before Next Leg Up

As with any financial asset, SHIB may simply be due for a technical consolidation and price correction after rallying strongly over preceding months. The dip could represent short-term profit-taking before the next major upward move, according to some analysts.

In summary, while counterintuitive, the broader market trends and complex dynamics of buying and selling pressure likely overwhelmed any positive impact the burn may have had in isolation. Reducing total supply is generally constructive long-term, but short-term price is hard to predict.

Community Rallies Behind BONE

In other Shiba Inu news, lead developer Shytoshi Kusama has been actively advocating for the listing of the BONE token on major exchange Binance. BONE is a key governance token within the Shiba Inu ecosystem, playing an important role in its Layer 2 solution Shibarium.

When Binance launched a token voting program allowing users to nominate and vote for which cryptocurrencies may be listed next, the Shiba army mobilized behind BONE. Kusama urged the sizable Shiba community to show their collective power by voting for BONE. Within the first few days, BONE had rapidly climbed the rankings to number 3 in nominations with over 37,000 votes – trailing only Delysium and Baby Dogecoin.

The developer emphasized BONE's fundamental role and real-world utility, arguing it deserves serious consideration from top-tier exchanges. A Binance listing could be tremendously positive for increasing BONE's availability, liquidity and broadening its investor base internationally. It's seen as an important milestone in the project's evolution and ambitious roadmap. Going forward, market expectations will be on whether BONE can rise to the top spot and achieve the coveted Binance listing.

Shiba Inu Technical Analysis

Let's zoom out and look at SHIB from a technical analysis perspective:

Market Cycle Stage

Many analysts believe the current crypto winter has further to fall before the next sustained bull market emerges. Most projects will face difficulties in the meantime as macro conditions remain unsupportive. Shiba Inu is not immune and may have further short-term downside to navigate weak sentiment.

Short Term Patterns

According to some chart watchers, SHIB formed a symmetrical triangle pattern on the 4-hour chart during its recent consolidation. A close above $0.000038 resistance could trigger an approximate 40% bullish breakout to $0.000052. But on the downside, a triangle breakdown opens the path to retest key support in the $0.000030-35 zone.

Longer Term Support

Stepping back to the monthly timeframe, SHIB found firm footing at its pandemic era all-time highs from 2021 around $0.000025-30. As long as this zone holds during the next broader crypto sell-off, bulls can feel confident about the longer term prospects. A clean breach, however, may lead to a deeper price correction.

Relative Strength

SHIB has outperformed Bitcoin and the overall market since late 2020. But its dominance appears to be waning in the current climate. Losing ground against BTC could signify increased downside risk for SHIB in both dollar and satoshi terms until risk appetite returns.

To summarize, in the absence of bullish macro and market reversals, traders should be mindful of both downside support levels and SHIB's performance relative to top currencies like BTC. Rangebound and choppy price action is expected to continue until broader conditions stabilize.

Final Thoughts

The Shiba Inu ecosystem continues to develop rapidly with ambitious roadmaps for scaling and utility. However, short-term price will always struggle against severe macro headwinds like the current crypto winter. The development team remains focused on building out the technology while periodic token burns aim to sustain gradual deflation long-term.

For shrewd investors, periods like these present an opportunity to cost average and accumulate top crypto assets at a discount for the next inevitable bull cycle. But shorter term traders will likely endure high volatility and ranges until risk appetite picks up on a wider scale. Overall, Shiba Inu’s fundamentals remain sound – it’s now a waiting game for the macro tide to turn.

That covers the key highlights and perspectives around Shiba Inu's unexpected price drop versus the 13 billion coin burn. As with all cryptocurrencies, many interplaying factors determine short-term price action. The long-term bull case for innovative projects like SHIB remains intact despite short-term volatility. The developer team continues progressing its ambitious vision, gradually gaining real-world utility amidst the deep crypto winter.