A recent report reveals that the burn rate of SHIB tokens on the Shiba Inu network has seen a remarkable increase. According to on-chain data, the SHIB burn rate saw a 1682.07% increase over the past 24 hours ending on January 29, marking the highest percentage rise in the network's history.
However, this spike in the burn rate is believed to be due to a malfunction in the SHIB burning machine, which recorded a low number of burned tokens on January 26. Analysts state that this increase was not triggered by increased network activity or a significant number of burned tokens.
Token burning is a process in which a portion of a cryptocurrency's tokens are permanently removed from circulation. The primary aim of this process is to reduce the number of coins in circulation, thereby increasing their scarcity. As the supply of a token decreases, the price of the token is expected to increase due to the law of supply and demand. This makes burning tokens an important tool in controlling the supply of a cryptocurrency and maintaining its value.
In addition to controlling supply, token burning can also improve the overall stability of a cryptocurrency's ecosystem. By reducing the number of tokens in circulation, token burning can reduce the risk of price manipulation, making the token more secure and less susceptible to market volatility.
However, recent SHIB whale activities indicate that top investors may have lost faith in the meme coin, leading to a decline in its value.
Short-term traders may also be contributing to this decline, as they believe the asset will not rise above the resistance level. This report highlights the need for continued monitoring of the Shiba Inu network and the performance of its burning machine.
No Possibility of Attaining $0.001 By SHIB: Motley Fool
In other news, a Motley Fool report recently discarded the possibility of Shiba Inu reaching $0.001 in 2023. It also discarded the possibility of the cryptocurrency hitting this price target at all.
In its report, Motley Fool explained that for SHIB to even attempt this level, it would need a perfect execution of all favorable catalysts possible this year, which it argued was impossible to achieve.
Furthermore, the Motley Fool report argued that with a circulating supply of approximately 550 trillion, a $0.001 price tag for SHIB will give the cryptocurrency a market valuation of approximately $550 billion. This valuation would make Shiba Inu “bigger than all but five publicly traded companies in the United States and would make no sense given SHIB's complete lack of utility.”
The report further stated that “while $0.001 might be a target SHIB holders like to dream about, it's far likelier Shiba Inu gets sent to the doghouse in 2023.”
Shiba Inu Struggles with Resistance Despite Favorable Catalysts
Over the past few weeks, Shiba Inu has been working towards breaching the $0.0000120 to $0.0000130 resistance area, but to no avail. After starting the year on a parabolic bullish move, SHIB remained restricted below the mentioned support area.
This struggle in price comes despite widespread excitement about the upcoming launch of the Shibarium blockchain, which many believe could be a game-changer for Shiba Inu. Shibarium essentially gives Shiba Inu real-world utility, making it more valuable.
At the same time, the broader market is recording a strong bullish sentiment as the crypto Fear and Greed Index crosses into “greed” (55) for the first time since March 2022.
The question now is: what will it take for SHIB to react proportionately and resume a sharp bullish trend?
SHIB Statistics Data
SHIB Current Price: $0.0000120
SHIB Market Cap: $6.61B
SHIB Circulating Supply: 549T
SHIB Total Supply: 589T
SHIB Market Ranking: #14
This article should not be taken as financial advice. It is essential to conduct research before making any investment decisions.