The burning rate of Shiba Inu (SHIB) has recently shown significant fluctuations. In the past 24 hours, the burn rate plummeted by 90.69%, attracting market attention.
Token burning is typically a deflationary mechanism aimed at enhancing scarcity by reducing supply, which should theoretically increase demand for the tokens. However, despite the existence of this mechanism, the burning actions seem to have a limited impact on the price of SHIB so far.
As we approach 2025, the market's focus is gradually shifting to whether sustainable value growth can be achieved through measures such as burning and whale trading, or whether the broader market environment will continue to overshadow the effectiveness of these efforts.
Changes in the burn rate
The burn rate refers to the speed at which tokens are permanently removed from the circulating market; this mechanism helps to reduce the total supply to some extent. Theoretically, a reduction in supply should drive an increase in demand, but recent data has shown a different situation.
In the past 24 hours, a total of 506,465 SHIB tokens have been burned, reflecting a sharp decline of 90.69% compared to previous burn volumes. This change indicates a sudden slowdown in burning activities, especially since just 10 hours ago, the burn volume had seen a significant increase of 578%.
However, despite a short-term decline in the amount of tokens burned, the burning data from the past week has shown a slight increase, reaching 65.19 million SHIB tokens, a year-on-year increase of 4.5%. This suggests that although the burn rate has slowed in the short term, the community's efforts to reduce supply are still ongoing.
Price trends and market sentiment
In terms of price, SHIB has recently struggled to maintain its November highs. Currently, the trading price of Shiba Inu coin is $0.00002167, and although it has risen by 1.69% over the past day, the overall market sentiment remains relatively low. The token's Relative Strength Index (RSI) is on a downward trend, indicating bearish market sentiment.
Additionally, according to the On-Balance Volume (OBV) indicator, market demand appears to be stagnant, and the decrease in trading volume indicates a declining participation rate of retail investors.
Although burning activities are a means to reduce the supply of SHIB, the current market performance suggests that the direct correlation between burning measures and price remains unclear, and the overall market environment continues to be an important factor affecting SHIB's price fluctuations.
Source: TradingView
Shiba Inu whale activity
It is noteworthy that whale trading plays an important role in shaping the market activity of Shiba Inu.
AMBCrypto's analysis of Santiment data shows that during the key price increases in October and November 2024, whale activity surged significantly. This indicates a direct correlation between large trades and the momentum of SHIB.
Source: Santiment
Interestingly, the latest data shows that whale trading activity remains very active. The trading volume above $100,000 continues to stay at around 938,000 transactions, indicating the sustained interest of well-funded investors in SHIB.
This trading activity not only enhances market liquidity but also brings greater volatility, as large sell-offs may limit the price rebound potential. In conjunction with the burning mechanism, whale trading acts like a double-edged sword — it can drive short-term speculative price increases but may also exacerbate adjustment pressure.
This phenomenon is crucial for the short-term development trajectory of SHIB in 2025. Despite the increase in whale activity and burning plans, they have failed to drive a significant price increase. The fundamental reason for this phenomenon is that macroeconomic uncertainties continue to affect investor sentiment.
The price movement of SHIB relies on the burning mechanism and the liquidity driven by whales, but the lack of broader applications and value support limits its upside potential. Therefore, as we move into 2025, SHIB's performance will continue to be constrained by these factors.
To change the current downward trend and achieve sustainable growth next year, the construction of the network and the popularization of the ecosystem will become key.
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