Shiba Inu (SHIB) Sees 60% Monthly Drop in Burn Rate: Reasons to Worry?

TL;DR

The Shiba Inu team burned millions of chips last month. The mechanism aims to reduce supply and potentially raise prices if demand remains strong. SHIB’s price fell 4% daily amid a market slump. However, improvements in the Shibarium network could lead to a future rally. Last month’s cream

The team behind the popular Shiba Inu meme coin continues to send tokens to a null address as part of its burning program. Data shows that tokens destroyed reached nearly 380 million last month after 178 total transactions.

The record day was July 11 when more than 70 million SHIB were burned, followed by July 22 (about 60 million SHIB). The monthly recording rate score may look impressive, but its USD equivalent is actually negligible. The July statistics also represent a 58.5% decline from the overall figure seen in June.

Even so, continued efforts in the field may positively affect the price of the meme coin due to the reduction in circulating supply. In this case, however, a potential upswing in SHIB will depend on the level of demand, which must remain or increase (as dictated by the fundamental principles of economics).

SHIB Price Outlook

The price of the second largest meme coin has seen better days, dropping 4% on a 24-hour scale and currently trading around $0.00001583 (according to data from CoinGecko). Its poor performance coincided with a general market decline where Bitcoin (BTC) briefly fell below $64,000, while Ethereum (ETH) fell to $3,100.

However, some important metrics related to the Shiba Inu ecosystem indicate that a resurgence could be in the cards. The Relative Strength Index (RSI), which measures the speed and change of price movements and identifies whether the asset is overbought or oversold, has been experiencing a decline of late.

The ratio ranges from 0 to 100, with a score above 70 indicating a correction could be imminent. The RSI is currently set around 30.

The possible advancement of the Shibarium layer 2 blockchain solution could also fuel a SHIB bull run. The network saw the light of day about a year ago and is designed to encourage the development of the Shiba Inu ecosystem by reducing transaction costs, improving scalability and improving speed.

Earlier this week, the protocol passed another major milestone, with the number of blocks processed surpassing 6 million. For more updates on the ecosystem, be sure to check out our Shibarium News.

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