Shiba Inu Price Teeters on Edge—1,550% Burn Rate Spike Can’t Stop the Crash Threat

Shiba Inu’s wild ride isn’t over yet. The meme coin’s burn rate just skyrocketed 1,550%—but don’t pop the champagne. Price action looks shaky, and traders are bracing for impact.

Is this the calm before the storm? Or just another day in crypto’s casino economy?

Here’s the kicker: Burns don’t always mean bulls. While token supply shrinks, market sentiment remains as volatile as a DeFi yield farm. One whale dump could send SHIB tumbling faster than a Wall Street analyst’s credibility.

Proceed with caution—and maybe keep some dry powder for the inevitable fire sale.

Shiba Inu price risky pattern points to a crash

The daily timeframe chart shows that the SHIB price has dropped below the 50-day and 100-day Exponential Moving Averages, which is often a bearish sign.

Worse, it is forming the highly bearish head-and-shoulders pattern, with its head at $0.00001760. The left and right shoulders are at $0.000016, while the neckline is at $0.00001027. 

This pattern often leads to a strong bearish breakout. If this happens, the initial target will be the neckline at $0.00001027. A MOVE below that level will indicate further downside, potentially to $0.000090.

A move above the psychological point at $0.000015 will invalidate the bearish SHIB price forecast. 

Rising SHIB burn rate not enough to boost price

Data shows that the shiba inu burn rate accelerated on Saturday. According to ShibBurn, the burn rate jumped by 1,550% to 3.77 million. 3.5 million of this burn came from one wallet, which moved its tokens to one of the inaccessible addresses. 

Shiba Inu is one of the most deflationary meme coins, as the circulating supply has dropped to 584 billion, down from 999.9 billion at its inception in 2021. In theory, a rising burn rate should boost a token’s price by reducing supply.

However, the rising burn rate may not be enough to ameliorate Shiba Inu’s woes. Nansen data shows that investors, who often buy low and sell high, have reduced their holdings to 61.7 billion from 70 billion last month. 

Similarly, demand from whale investors has eased as their holdings have remained intact at 45 billion since early July. This is a sign that these investors don’t expect substantial gains in the NEAR term. 

Additional data indicates that Shiba Inu’s futures open interest has decreased to $173 million, down from $328 million as of July 22. Falling interest rates are bearish, as they indicate low demand among investors. 

Worse still, Shiba Inu’s ecosystem is not performing well, with the total value locked on Shibarium plunging to $1.69 million. Strong Shibarium growth is bullish for SHIB price as it boosts its burn rate and sentiment among investors.