Shiba Inu (SHIB) shows signs of a potential comeback, despite a recent 9% price decline. Analysts highlight several key factors that could lead to a resurgence in the meme coin’s value.
Rising Burn Rate Fuels Scarcity
The Shiba Inu team implemented a token burning mechanism in 2022 to reduce the massive circulating supply. Recently, the burn rate surged, with around 60 million tokens destroyed in just 24 hours. This represents a remarkable 500% increase compared to the previous day. Currently, over 41% of SHIB’s initial supply has been burned, leaving approximately 583 trillion tokens in circulation. This significant reduction in supply may support a price increase if demand remains steady or grows.
Shift to Self-Custody Boosts Market Sentiment
Another important factor is the shift in SHIB exchange netflow. Over the past month, outflows from exchanges have greatly exceeded inflows. This trend indicates a movement from centralized exchanges to self-custody methods, which often signals bullish price action. Such a shift minimizes immediate selling pressure. A similar pattern occurred in early March, leading to a notable bull run for Shiba Inu, which saw a remarkable triple-digit price increase within weeks.
Increased Open Interest Indicates Market Activity
Last week, Shiba Inu’s open interest surpassed $30 million, reaching a one-month high. This rise in open interest suggests increased market participation and hints at potential price volatility. While this metric does not guarantee positive movements, it often precedes significant market actions. If the broader cryptocurrency market experiences a rally, this heightened open interest could further enhance SHIB’s price performance.
Progress with Shibarium Enhances Ecosystem
Shibarium, Shiba Inu’s layer-2 scaling solution, has made substantial progress since its launch about a year ago. To date, Shibarium has processed over 400 million transactions and produced more than 5.5 million blocks. Its primary goals include reducing transaction costs, enhancing speed, and improving scalability within the Shiba Inu ecosystem. Continued advancements in this project could positively impact SHIB’s valuation, making the ecosystem more efficient and attractive to developers and users.
While Shiba Inu has faced recent price declines, several indicators suggest a possible turnaround. The increasing burn rate, reduced netflow to exchanges, elevated open interest, and significant progress in the Shibarium project all indicate potential for a price resurgence. Investors should closely monitor these factors for future movements.
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