Shiba Inu coin price has experienced a significant decline, plummeting over 35% from its December high. The downward trend is attributed to the decreasing burn rate and Shibarium fees, which could lead to further downside risks.

Declining Burn Rate and Shibarium Fees

According to recent data, SHIB’s burn rate has continued to decrease, with 8.73 million tokens burned in the last 24 hours – a 71% drop from the previous day. A likely reason for this significant drop is the weak performance of the Shibarium ecosystem, with only 1,250 active accounts on the network.

The average transaction fee on Shibarium has also declined to 0.00023 BONE, down from December’s peak of 0.00045. As a result, the total BONE spent on gas fees has dropped to 1,715 BONE, equivalent to around $771.

Impact of Shibarium Performance on SHIB Price

Shibarium’s performance is crucial for SHIB’s price, as the network plays a key role in token burns. A portion of the BONE fees generated on Shibarium is converted into SHIB and then burned, reducing the token supply.

Investor Sentiment Shifts

Data from Nansen shows that smart money investors are reducing their exposure to SHIB. The number of smart money addresses holding SHIB has fallen to 25, down from nearly 40 in November. This shift may be due to Shiba Inu’s underperformance compared to other meme coins, prompting investors to pivot to alternatives.

SHIB Price Chart Analysis

The daily chart indicates that SHIB’s price could see further declines. The token has fallen from a high of $0.000033 in November to $0.00002150 as of today. SHIB has broken below the 50-day and 100-day moving averages, forming a bearish flag chart pattern. This pattern often precedes a significant bearish breakout, and SHIB could drop to the next support level at $0.00001082, which would be a 50% decline from current prices.

Potential Bullish Reversal

On a more optimistic note, there are signs that SHIB is also forming a cup-and-handle pattern. If this bullish pattern plays out, the recent pullback may be part of the handle section. In that scenario, SHIB could retest the upper boundary of the cup before embarking on further gains.

Key Takeaways:

  • SHIB’s burn rate and Shibarium fees continue to decline, posing downside risks for the token’s price.
  • Shibarium’s weak performance is impacting SHIB’s price, with a decrease in active accounts and transaction fees.
  • Smart money investors are reducing their exposure to SHIB, shifting to alternative meme coins.
  • The SHIB price chart indicates potential further declines, but also shows signs of a potential bullish reversal.

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