Shiba Inu price could rise 60% as burn rate rises 3,400%

Even though the burn rate increased by over 3,400%, the Shiba Inu price dropped for two days in a row.

Shiba Inu (SHIB), the second largest meme coin, fell 16.2% from this month’s high to $0.00002765.

This pullback was mostly due to the ongoing pullback of Bitcoin (BTC) and other cryptocurrencies. Bitcoin fell below $95,000 as the rise to $100,000 appeared elusive.

However, crypto analysts believe that SHIB price is on the rise further as the altcoin seasonal index rises to 80. In most periods, meme coins like Shiba Inu tend to perform well when altcoins are rising.

Another potential catalyst for the coin is the increase in the number of Shiba Inu tokens being burned. Shiburn’s data shows that the burn rate increased by 3,426% to over 2.02 billion. This means that more than 410 trillion tokens have now been burned, leaving the circulating supply at 583 trillion.

Token burns are used to create value for a crypto project by reducing the number of coins in circulation. In Shiba Inu’s case, these burned tokens come from project fees like Shibarium and ShibaSwap.

Shibarium is the layer 2 network of the network; ShibaSwap is a decentralized exchange where users swap tokens. Data shows that ShibaSwap has over $26 million in assets, while Shibarium has processed almost 600 million transactions. BONE tokens collected in these chains are converted into SHIB and burned.

Shiba Inu price may increase by 60% SHIB chart | source: crypto.news

Technicals point to a potential increase in SHIB prices in the near term. A golden cross pattern was formed when the 50-day and 200-day Exponential Moving Averages (EMA) reversed each other. This cross is a popular bullish sign in technical analysis.

The Shiba Inu formed the cup and handle chart formation, which is a popular sign of an uptrend. The recent consolidation is part of the handle part of this formation.

While the MACD indicator rose above the zero line, the MVRV indicator rose to 3.2. Therefore, the coin will likely bounce back and retest the year-to-date high at $0.000045, which is around 63% above the current level. A break below support at $0.0000022 will invalidate the bullish view.