Shiba Inu Burn Rate Plunge Sparks 10% Drawdown Fears
Shiba Inu's (SHIB) burn rate has declined by over 60% in the past week, according to data from Shibburn. This reduction in token destruction weakens the deflationary narrative that has been a core part of SHIB's value proposition.
A higher burn rate reduces supply, which can support price, while a lower rate may increase supply pressure and potentially drive prices lower.
Historically, spikes in the burn rate have coincided with short-term price rallies, as reduced supply often attracts speculative buying. Conversely, sustained declines in burn activity have preceded periods of price consolidation or correction.
From a technical perspective, SHIB is trading near a critical support zone at $0.000010. Immediate support lies at $0.00000950, and the next major support is at $0.00000880, which corresponds to a drawdown of approximately 12% from current prices.
The Relative Strength Index (RSI) on the daily chart is currently at 42, indicating bearish momentum but not yet oversold. The Moving Average Convergence Divergence (MACD) line has crossed below the signal line, a bearish signal that often precedes further downside.