Is a Falling Burn Rate Threatening Shiba Inu’s Price Outlook?

Shiba Inu (SHIB) Faces Uncertainty as Burn Rate and Trading Volume Decline

Shiba Inu (SHIB), widely known as the leading meme coin on the Ethereum blockchain, is experiencing a challenging period in the crypto market. As of June 9, SHIB traded at $0.00001200—just above its year-to-date low of $0.000010. Recent trends suggest that the token could be at risk, with several key blockchain metrics causing concern among investors and traders.

 

Reduced Demand and Slumping Trader Interest

A notable factor affecting Shiba Inu’s price is a substantial drop in daily trading volume, which recently hovered around $140 million. This decrease means less market participation compared to other trending meme coins such as Pepe (PEPE), Bonk (BONK), and Fartcoin. The waning trading volume signifies SHIB’s declining popularity and investor engagement, posing a challenge for short-term price momentum.

Burn Rate Collapses, Potentially Weakening Supply Dynamics

Another worrying sign for SHIB enthusiasts is the dramatic reduction in the burn rate. Over the past few days, Shiba Inu's token burn rate has plunged by 98%, with just 11.19 million SHIB—about $143 in market value—being permanently removed from circulation. Given the project’s market capitalization exceeding $7 billion, this level of token burning is considered negligible and unlikely to make a meaningful impact on price by reducing supply.

Shibarium's Slow Growth Limits Ecosystem Expansion

The much-anticipated Shibarium layer-2 network is also struggling to gain traction with developers and users alike. Currently, Shibarium hosts just 18 decentralized applications (dApps) and has a total value locked (TVL) of only $2.3 million. In comparison, rival and fast-growing layer-2 solutions like Base, Unichain, and Arbitrum have attracted considerably more user and developer activity, further highlighting Shibarium’s adoption challenge.

Whale Activity and Derivative Markets Signal Caution

Investor confidence is further dampened by the behavior of crypto whales. Data from on-chain analytics platform Nansen indicate that large holders have reduced their SHIB positions to 33.8 billion tokens from a recent high of 34 billion. Additionally, Shiba Inu futures open interest has plummeted from nearly $600 million earlier in the year to just $156 million, showing that traders are reducing their leveraged exposure to SHIB.

Technical Analysis: Is More Downside Ahead for SHIB?

Looking at Shiba Inu’s price action, SHIB is currently trading under its 50-day and 200-day Exponential Moving Averages, a traditional sign of bearish momentum. Of particular interest is the potential formation of an inverse cup-and-handle pattern, which frequently precedes further declines. Confirmation of additional weakness may come if SHIB falls below the critical support at $0.00001025—this could open the door to a move beneath the psychological $0.000010 level.

On a brighter note, some technical analysts see potential for recovery if the chart pattern evolves into a double top with a neckline at $0.000017. A decisive breakout above this resistance could suggest renewed bullish momentum and bring optimism back to SHIB holders.

Outlook for Shiba Inu Amid Uncertainty

As investors monitor on-chain data, burn rate dynamics, and broader market sentiment, Shiba Inu’s future direction remains uncertain. Crypto traders and holders should stay attentive to price signals, whale activity, and ecosystem developments, as these will likely shape the next major movement for SHIB in the evolving world of digital assets.