Shiba Inu (SHIB) cryptocurrency’s burn mechanism went off at a very high level on August 11. On August 11, the burn mechanism permanently removed 38.8 million SHIB tokens from circulation.
This was a huge 38,199,412.62% increase compared to the previous day’s burn activity. But this rise didn’t last long. According to data from Shibburn, a website that tracks SHIB token burns, the burn rate dropped sharply by 96% the next day.
Shiba Inu Burns Tokens
In the crypto world, burning tokens is a popular way to make things scarce and fight inflation. Shiba Inu employs this method by allocating a portion of transaction fees to designated “burn” addresses. “Null addresses,” as they are known, have the ability to receive tokens but not send them. This means that the tokens are no longer in circulation.
The massive fire had almost no effect on SHIB’s price. It was a ~5% drop across the whole coin market over the weekend, and Shiba Inu followed suit. The market structure looked bullish on the 4-hour chart, but higher timeframes showed a bearish picture.
The on-balance volume (OBV) has been going down, albeit more slowly, over the last four days, while the relative strength index (RSI) stayed around the neutral 50 mark.
Market experts are keeping a close eye on the SHIB liquidity levels, especially at $0.0000125 and in the range of $0.0000145 to $0.0000150. These marks could be important clues about how SHIB will move in the near future.
It’s still not clear which liquidity pocket SHIB will go after first, but the bearish goal seems more likely to be hit because there is less demand there right now and there is more liquidity there.
The recent burn event serves as a warning of how unpredictable the crypto market is, even as the Shiba Inu community continues to guess what will happen next.
