After a remarkable 47% surge in September, Shiba Inu (SHIB) plunges sharply, erasing some of its gains. Blame it on a plummeting burn rate, decreased whale activity, and a slowing ecosystem. The real question remains: is SHIB doomed to vanish... or is it gearing up for a fresh surprising rebound?
The Shiba Inu price has effectively rebounded by more than 47% from its monthly low. It reached $0.000010 with a 10% increase from the weekend’s bottom. This performance follows in the wake of Bitcoin and leading altcoins benefiting from renewed market interest. However, behind these encouraging figures lie fundamentally less optimistic dynamics.
The correlation with Bitcoin remains strong, as is typically the case with memecoins. When BTC gains ground, Shiba Inu follows almost mechanically. But this dependency raises questions: does the token truly possess its own catalysts, or is it merely riding waves created by major cryptocurrencies?
Trading volumes on major platforms show increased volatility, indicating that short-term traders are capitalizing on these fluctuations. However, caution is warranted, as this volatility can work both ways, especially when fundamentals are wavering.
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The token burning mechanism represents one of the strategic pillars of the Shiba Inu project. By permanently removing SHIB from circulation, this process aims to create artificial scarcity and support the price long-term. However, the daily destruction rate is currently experiencing an alarming decline that calls into question this deflationary dynamic.
In practical terms, fewer burned tokens mean a circulating supply that remains high, which mechanically dilutes the value of each unit. The SHIB ecosystem was counting on these regular burns to offset its stratospheric initial supply. Without this indirect buying pressure, the token loses one of its main valuation arguments.
This situation comes at a critical moment when the community was precisely expecting an acceleration of burns to revive interest. Initiatives like Shibarium, the project’s layer 2, were theoretically supposed to increase token destruction through transaction fees. However, results have been slow to materialize.
On-chain data reveals a capitulation movement among large SHIB holders. Wallets containing more than 100 million tokens have significantly reduced their positions in recent weeks. These whales, who often accumulated during previous cycles, now appear to be taking profits or limiting losses.
This behavior sends a powerful bearish signal to the rest of the market. Retail investors naturally observe movements of large wallets and tend to follow these trends. When whales sell, selling pressure intensifies and technical support levels give way more easily.
Analysis of flows to exchanges confirms this trend: transfers of SHIB from private wallets to exchange platforms have increased, suggesting imminent selling intent. Conversely, withdrawals to cold storage, a sign of long-term confidence, are stagnating. The exchange inflow/outflow ratio clearly leans toward the wrong side for the token.
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