Shiba Inu has entered a critical phase after its burn rate dropped sharply by over 99 percent in just 24 hours. Investors are growing increasingly concerned that the meme coin may lose further value and possibly add another zero to its price.
According to the information provided by Shibburn, 101,213 SHIB tokens were incinerated in the recent period, indicating a sharp decrease in the number of people engaged in the deflationary mechanism.
This decline is a 99.32 percent drop in the number of tokens taken out of the market and crippling one of the major value-preserving aspects of the coin.
Shiba Inu has a total supply of 589.25 trillion tokens, yet there is still 584.53 trillion of the coin in circulation. The remaining amount, which consists of 4.71 trillion tokens, is staked within the ecosystem.
Significant reduction in burns has led to speculations that the project has already lost momentum in one of its key methods of increasing the price.
SHIB also recovered its price, albeit in a minor correction, in spite of the burn activity dying off. It increased by a substantial margin as it moved up from a 24-hour low of $0.00001151 to a high leading to $0.00001178. But as of press time, it has slightly shifted to 0.00001166 due to the continuing fluctuations in the market.
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Exchange Reserves and Futures Activity Offer a Glimmer of Hope
Trading volume has seen a dip, down 2.57 percent to $110.01 million. This signals a decrease in market participation, further raising concerns among holders about whether the current support level will hold.
Interestingly, other market metrics suggest that a recovery may be on the cards, as CryptoQuant reported that Shiba Inu exchange reserves have grown to $929 million. This implies intensified trader action and may indicate future buying or selling demand.
Speculative interest in the SHIB futures market has also grown. The strategy traders seem to be pursuing by keeping SHIB above its present support is that it will not fall further at the expense of a fundamentally weak token burning.
The seriousness of Shiba Inu raises doubts as its burning mechanism fails, making it more probable that the token will add another zero if the burn rate does not improve. However, rising exchange reserves and future activity may offer a lifeline if trading momentum continues to build.
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