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Shiba Inu Faces Bearish Pressure Amid Declining Burn Rates and Whale Selling
Shiba Inu has entered a local technical bear market after experiencing a significant drop of over 17% from its monthly peak. On Sunday, Shiba Inu was trading at $0.000014, with its 24-hour trading volume decreasing to $158 million—a figure considerably lower than other popular meme coins such as Dogecoin, Pepe, Official Trump, and Bonk.
Key Factors Behind Shiba Inu’s Underperformance
The recent underperformance of Shiba Inu can be attributed to two main factors: ongoing selling by whales and smart money investors, and a sharp decline in the burn rate. Data from ShibBurn indicates that the daily burn rate has plummeted by 85% to just 2.14 million tokens. Similarly, the weekly burn rate has also fallen, with the largest burn transaction of the week amounting to 23.5 million tokens on Thursday.
“Burn rates play a crucial role in reducing token supply and boosting investor confidence.”
Historically, Shiba Inu’s price has shown positive momentum when more tokens are burned, as this mechanism reduces the circulating supply and enhances market sentiment. To date, over 410 trillion SHIB tokens have been burned from the initial supply.
Whale Activity Signals Further Selling Pressure
Data from Santiment reveals that whale investors have been actively selling their SHIB holdings since January. On January 19, whales held over 743 trillion tokens, but this figure has now dropped to 725 trillion, indicating a sale of over 18 trillion tokens. Such behavior suggests that large investors anticipate further price declines.
Additionally, despite Bitcoin’s surge to nearly $112,000 last week—a move that traditionally boosts altcoins like Shiba Inu—whale selling persisted. This divergence is unusual, as Shiba Inu typically benefits from Bitcoin’s bullish trends.
Smart Money Investors Shift Focus
Data from Nansen reveals that smart money investors have also reduced their exposure to Shiba Inu. Their SHIB holdings have declined from 14.53 billion tokens on April 8 to 14.13 billion today. This shift indicates a rotation of investments into faster-growing meme coins like Fartcoin and Dogwifhat, which are capturing market attention.
Shiba Inu Price Technical Analysis
Despite the bearish sentiment, there are indications that Shiba Inu may have reached a bottom. Technical analysis of the daily chart shows that SHIB is currently trading near its 100-day Exponential Moving Average (EMA). Additionally, the price has formed a cup and handle pattern, with the upper resistance level at $0.00001733.
The recent decline appears to be part of the handle formation within this pattern. The cup has a depth of approximately 40%, and measuring the same distance from the upper resistance suggests a potential price target of $0.00002443. Notably, this target aligns with Shiba Inu’s highest point in January, offering a potential upside for investors willing to take calculated risks.
Final Thoughts
Shiba Inu’s current price movement reflects broader challenges within the cryptocurrency market, including declining burn rates and significant selling by whale and smart money investors. However, technical indicators suggest a possible recovery, especially if market conditions improve and burn rates stabilize. Investors should monitor key levels such as the 100-day EMA and the cup and handle pattern for potential entry points.
