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TL;DR
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A substantial surge in token burning and rising activity on Shibarium suggest renewed momentum could be building for Shiba Inu’s native token.
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Additionally, recent exchange outflows signal SHIB holders are shifting to self-custody, which supposedly reduces short-term selling pressure.
Time for a New Surge?
The second-largest meme coin witnessed a solid price increase towards the end of April, when the entire cryptocurrency market recorded a substantial revival. However, in the past week, Shiba Inu (SHIB) has slipped by almost 10%, currently trading at approximately $0.0000127 (per CoinGecko’s data).
Certain factors, though, suggest that a new pump might soon replace the downtrend. The burn rate, for instance, has soared by over 300% in the past week, resulting in more than 300 million tokens sent to a null address.
While the USD equivalent of the destroyed stash remains insignificant, continuous efforts in that field will make SHIB more scarce and possibly more valuable. It is important to note that this scenario will require demand to head north or at least remain at current levels.
Shiba Inu introduced the burning mechanism in 2022. Since then, the team and community have scorched over 410 trillion tokens, leaving around 584.4 trillion in circulation.
Shibarium may also contribute to a potential price expansion for the self-proclaimed Dogecoin killer. The layer-2 scaling solution is specifically designed to advance the Shiba Inu ecosystem, and since its launch, it has reached multiple milestones. Most recently, the total number of addresses that have interacted with the protocol surged past 200 million.
Daily transactions on the network have been in the millions in the past several weeks, signaling strong user engagement. Among the industry participants who believe the further development of Shibarium could positively impact the price of SHIB is the popular Bitcoin advocate Jeremie Davinci.
Exchange Outflows
Last but not least, we will examine Shiba Inu’s exchange netflow. Data from CryptoQuant shows that in the last three days, outflows have surpassed inflows, indicating that investors may be moving their holdings off centralized platforms and into self-custody solutions. This, in turn, reduces the immediate selling pressure.
The trend contrasts with what was observed at the end of last month, when inflows dominated from April 22 to April 29. This is usually considered a bearish factor since it increases selling pressure. Interestingly, it was during this particular period that SHIB reached its local peak before heading south after April 26.
As a bonus, we would like to refer you to a previous article, which showed that the AI-powered chatbot ChatGPT is also bullish on the asset, estimating that it “is positioned to ride the next wave.”
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