Shiba Inu price has crashed to a critical support level this year. SHIB token dropped to a low of $0.00001443, down by about 55% from its highest point this year. It has plunged by over 65% from last year’s high. So, what next for the SHIB coin as its burn rate accelerates?
Shiba Inu burn rate accelerates
A potential catalyst for the SHIB price is the ongoing incineration. Data by Shiburn shows that the burn rate has jumped by over 57,0000% in the last 24 hours. This increase happened after one user moved 1 billion tokens to a dead address. At the current price, these tokens are worth over $14,500.
This burn happened after another user incinerated 1 billion Shiba Inu coins. Another user burned over 2.1 million Shiba Inu coins on Thursday. Therefore, these token burns mean that the coin’s inflation will continue going down in the coming months.
Data shows that there have been over 410 trillion Shiba Inu coin burns over the years. These burns have lowered the number of tokens in circulation to about 584 million coins, a number that will continue falling in the next few years.
However, the reality is that the overall deflation is not all that big when you compare the size of Shiba Inu, which has a market cap of over $7 billion.
Potential catalysts for SHIB coin
There are several potential catalysts for the Shiba Inu coin. First, Donald Trump’s tariffs will likely lead to a recession in the United States. While a recession is a bad thing, history shows that risky assets bounce back after the initial drop.
The main driver for these assets when there is a recession is that the Federal Reserve tends to intervene when markets crash. The bank does that by cutting interest rates and implementing quantitative easing policies that flood the market with money.
At the same time, the federal government often intervenes by providing money to support key sectors. For example, in the 2008/9 crisis, the government spent over $700 billion in saving the banking sector. It spent trillions of dollars during the COVID-19 pandemic.
The fiscal and monetary interventions draw investors into risky assets like cryptocurrencies and stocks. Such a move will benefit cryptocurrencies like Bitcoin and Shiba Inu coin.
Second, Shibarium, its layer-2 network may boost Shiba Inu price. Data shows that the network is nearing 1 billion completed transactions now that it has handled over 975 million coins. The number of accounts has grown to over 245k, while blocks have risen to 10.15 million coins.
Shibarium is an important part of Shiba Inu’s ecosystem in that the fees generated in the ecosystem are converted into Shiba Inu and then incinerated. While Shibarium has not been all that successful, there is a likelihood that it will be in the future.
Shiba Inu price technical analysis
SHIB price chart by TradingView
The weekly chart shows that the SHIBZ coin has been in a downward trend in the past few weeks. It has crashed from a high of $0.000035 to low of $0.00001525.
Shiba Inu price has moved slightly below the 50-week Exponential Moving Average (EMA), which is a bearish view.
However, on the positive side, it has formed a megaphone chart pattern, which is characterized by two ascending and broadening wedge pattern. It is one of the most popular bullish patterns in technical analysis.
Therefore, the SHIB coin price will likely have a strong bullish breakout in the coming weeks, with the next key point to watch being at $0.00003395, which is about 130% above the current level.
Read more: Shiba Inu coin price prediction: why the next SHIB price target is $0.000024
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