Shiba Inu Jumps 12% in Burn Rate, But Price Is Still Down

Shiba Inu ($SHIB), the dog-themed meme coin, has recorded a positive on one of its critical metrics in the last 24 hours. The ecosystem’s deflationary mechanism, the burn rate, flipped green as it climbed by 12.11% amid increased activities aimed at stabilizing the price outlook.

$SHIB trading volume decline signals weak market p9articipation

Shibburn data shows that a total of 3,011,445 $SHIB were permanently removed from the Shiba Inu ecosystem following the uptick in burn rate. This is significant considering that the burn rate had, in recent times, remained deep in the red zone.

At other times, the burn rate crashed to zero or near zero repeatedly as overall sentiment stayed bearish in the $SHIB community. With the burn rate back in the green, community members will be anticipating a possible price improvement.

Notably, the burn rate is the ecosystem’s way of regulating circulating supply. An increase in burn rate mops up and permanently wipes out the tokens with the aim of creating scarcity. This often results in increased price value.

Shiba Inu‘s price has been facing severe fluctuations, crashing from an intraday peak of $0.000006888 to a low of $0.000006436 within the last 24 hours. As of this writing, Shiba Inu exchanged hands at $0.000006636, which represents a 3.22% decline within the time frame, but with 9% weekly growth.

Despite the drop, it appears the burn activity has supported its climb up from its previous intraday low. However, trading volume remains in the red zone, down by 28.97% to $165.03 million. Although the intense sell-off is gradually easing for $SHIB, the meme coin sector is experiencing market-wide weakness.

The meme coin market capitalization recently plunged by over 30% as investor sentiment shifted to perceived safer assets in the crypto sector. This capital rotation away from meme coins has impacted Shiba Inu’s price recovery.

Shiba Inu’s recovery tied to improving on-chain indicators

Interestingly, before this capital rotation, traders in the Shiba Inu community had their hope rekindled when 140 billion $SHIB exited exchanges. The outflow suggested investors were not looking to sell their assets and had decided to move them into long-term storage.

The development helped ease sell pressure temporarily as $SHIB posted a 17% recovery from its recent lows. Notably, Shiba Inu had shed over 30% of its value in the past month as a result of constant sell pressure on the meme coin.

In order for Shiba Inu to stay out of the bearish zone, other metrics, such as price and trading volume, would need to flip green. Market participants need to actively trade the meme coin and support its recovery journey, as only the burn rate might not sustain gains for long.