Shiba Inu (SHIB) continues to struggle within a well-defined downtrend, despite a modest recovery from recent lows. Trading near $0.000012650, the meme-inspired cryptocurrency faces growing pressure as key deflationary mechanisms show signs of weakening. The most concerning development? A dramatic 63% drop in SHIB’s daily burn rate — a critical factor in its long-term supply reduction strategy.
While price action has stabilized slightly, with on-chain data revealing pockets of investor accumulation, the broader technical and economic outlook remains bearish. With trading volume surging by 78% amid the burn slowdown, market sentiment appears conflicted — reflecting both panic selling and strategic buying at lower levels.
This article dives deep into the current state of SHIB, analyzing on-chain behavior, technical structure, and the implications of a slowing token burn. We’ll also explore potential support zones and what it could take for SHIB to reverse its current trajectory.
Understanding the SHIB Burn Mechanism and Its Decline
Token burning — the permanent removal of cryptocurrency from circulation — is a core component of many deflationary token models. For Shiba Inu, regular burns are intended to reduce total supply over time, theoretically increasing scarcity and supporting price appreciation.
However, recent data reveals that SHIB’s daily burn rate has plummeted by 63%, undermining this foundational economic principle. Fewer tokens being burned means slower progress toward deflation, which can erode investor confidence, especially during prolonged bear markets.
A declining burn rate often signals reduced network activity or lower transaction volumes, both of which impact the number of tokens destroyed as fees. It may also reflect shifts in community-driven burn campaigns or changes in ecosystem usage.
👉 Discover how tokenomics influence long-term crypto value and what to watch next.
On-Chain Data Reveals Key Support Zones
Despite the negative headwinds, on-chain metrics offer a glimmer of hope. There is a notable concentration of SHIB holdings among investors whose average cost basis lies between $0.000012 and $0.000013. This range has emerged as a potential psychological and technical support zone.
When a large number of holders have purchased assets within a narrow price band, they often act collectively to defend those levels — either by refusing to sell below cost or actively buying the dip. This behavior can create strong floor support, especially if accompanied by rising trading volume.
In fact, over the past 24 hours, support materialized near $0.00001236, backed by significant buying pressure. A volume spike at 08:02 UTC — exceeding 14.9 billion SHIB traded — confirmed short-term bullish momentum, briefly pushing prices higher.
Such activity suggests that while the broader trend remains down, there is active accumulation occurring at current valuations. This could set the stage for a consolidation phase before the next major directional move.
Technical Outlook: Downtrend Remains Intact
From a technical perspective, SHIB continues to trade below key moving averages, including the 100-day Simple Moving Average (SMA) — a widely watched indicator of long-term trend direction.
The current downtrend is defined by lower highs formed on May 12 and May 23, along with a swing low set on May 17. Prices briefly dipped to $0.00001234 during Asian trading hours but have since recovered slightly.
Still, without a clear break above resistance levels, the bearish structure remains valid. Any sustained rebound would likely need to clear $0.00001350 and hold volume momentum to signal a potential trend reversal.
Until then, traders should expect continued volatility within a descending channel, with support around $0.000012 acting as the last line of defense before deeper corrections unfold.
Why Volume Surge Amid Burn Slowdown Matters
One of the more intriguing aspects of SHIB’s recent movement is the 78% increase in trading volume despite the sharp decline in burns. High volume during price declines typically indicates distribution — large holders selling into the market.
However, when combined with strong on-chain support signals, this could instead reflect increased liquidity entering the market at attractive prices. In other words: fear-driven selling is being met with calculated buying.
This dynamic often precedes periods of consolidation or even reversal, particularly when institutional or whale investors begin accumulating discounted assets.
Yet caution remains warranted. High volume without follow-through buying can lead to “sucker’s rallies” — temporary bounces that ultimately fail to sustain upward momentum.
👉 Learn how to analyze volume trends and spot real accumulation vs. market noise.
Core Keywords Driving SHIB Analysis
To ensure clarity and search relevance, here are the core keywords naturally integrated throughout this analysis:
- SHIB price prediction
- Shiba Inu burn rate
- SHIB deflationary model
- SHIB on-chain data
- SHIB technical analysis
- SHIB support levels
- SHIB trading volume
- SHIB downtrend
These terms reflect both user search intent and the fundamental drivers influencing SHIB’s market behavior.
Frequently Asked Questions (FAQ)
What is the SHIB daily burn rate?
The SHIB daily burn rate refers to the total number of Shiba Inu tokens permanently removed from circulation each day, usually through transaction fees or community-led burn events. A healthy burn rate supports deflationary goals by reducing supply over time.
Why did SHIB’s burn rate drop by 63%?
The exact cause isn't publicly specified, but possible reasons include reduced network activity, fewer transactions on Shiba Inu-based platforms, or a slowdown in community-driven burn initiatives. Lower usage across decentralized applications (dApps) in the ecosystem could also contribute.
Is SHIB still in a downtrend?
Yes. Despite a short-term recovery from $0.00001234 to $0.000012650, SHIB remains in a confirmed downtrend based on trendlines connecting lower highs since mid-May and continued trading below the 100-day SMA.
What are the key support levels for SHIB?
Key support lies between $0.000012 and $0.000013, where a significant number of investors hold positions. A breakdown below $0.000012 could open the door to further losses, while sustained defense of this zone may lead to consolidation or rebound attempts.
Can SHIB recover if burns remain low?
Recovery is possible, but challenging. While price movements are influenced by multiple factors — including market sentiment, macro trends, and exchange inflows — a persistently low burn rate weakens SHIB’s long-term value proposition tied to scarcity.
How does trading volume affect SHIB’s price?
Rising volume during price drops can indicate panic selling or active accumulation. In SHIB’s case, a 78% volume increase alongside falling burns suggests heightened volatility and conflicting market views — potentially setting up a pivotal breakout or breakdown soon.
👉 Stay ahead with real-time data and tools that help track burn rates and trading volume shifts.
Final Thoughts: Cautious Watch Ahead
Shiba Inu stands at a crossroads. While investor interest persists at key support levels and on-chain signals hint at accumulation, the sharp 63% decline in daily burns presents a serious challenge to its deflationary narrative.
For SHIB to regain bullish momentum, it will need more than just temporary buying pressure — it requires renewed ecosystem activity, stronger token utility, and consistent progress toward supply reduction.
Until then, traders should remain cautious, respecting the existing downtrend while monitoring volume patterns and support reactions closely. The coming weeks could determine whether SHIB stabilizes for a potential recovery or extends its decline into uncharted territory.
Regardless of outcome, staying informed with accurate on-chain insights and technical analysis will be crucial for navigating SHIB’s volatile journey ahead.