Coin Edition -
- SHIB tokens burned in the last 24 hours surpassed 82 million as the token value decreased.
- The funding rate is positive, suggesting mid-term bullish sentiment for SHIB.
- If buying pressure keeps falling, SHIB’s price may drop from $0.0000081.
The number of Shiba Inu (SHIB) tokens burned in the last 24 hours reached almost 83 million, according to data from the Shibburn website. The amount represents a 913.89% increase within the period.
SHIB burn refers to the process of removing SHIB tokens from circulation and sending them to dead wallets. The primary aim of this mechanism is to create scarcity for the cryptocurrency while increasing the value of the remaining accessible tokens.
SHIB Burn Rate (Source: Shibburn)
SHIB Drops, But Traders Are Bullish
So, it is expected that when the burn rate increases, the price action should follow suit. However, this does not occur in all instances, as the burn mechanism targets long-term influence rather than short-term impacts.
This time, the price of SHIB decreased by 2.20% despite the simultaneous spike in the burn rate. The price decline could be linked to the broader market slump, which has left altcoins and meme coins alike in the red zone.
Despite the decrease in value, traders are betting on SHIB to recover. This was shown by the weighted funding rate provided by CoinGlass. The funding rate is a metric to ascertain the sentiment traders have in the market.
When the funding rate is positive, it means open futures contracts are predicting a price increase for the cryptocurrency in question. Conversely, a negative funding rate suggests that the average market sentiment is bearish.
At press time, SHIB’s funding rate was 0.0169%, indicating that the price decrease is not enough reason for traders to back down on their bullish conviction.
SHIB Funding Rate (Source: CoinGlass)
No Way Out for a Rise Yet
From the technical perspective, SHIB’s price may not jump above $0.0000081 soon. This is because the volume around the cryptocurrency has been low. Also, accumulation has not been as impressive as bulls would desire.
One indicator that proves this notion is the Money Flow Index (MFI). At the time of writing, the MFI, after hitting 61.44 in the early hours of November 30, fell to 51.32. High MFI values indicate an increase in buying pressure.
However, since the indicator reading dropped, it implies that the buying momentum had slowed down. Should the MFI reading fail to revive, SHIB has the tendency to go below $0.0000080. Like the MFI, the Moving Average Convergence Divergence (MACD) denoted that SHIB might either drop from its current price or consolidate.
SHIB/USD 4-Hour Chart (Source: TradingView)
If any sign of buying pressure fails to emerge, SHIB may have no other option than to continue trading around $0.000008. For traders with bullish positions, it might take a while before SHIB breaks out toward the $0.00001 region.
The post SHIB Burn Rises 900%: What Does This Mean for the Token? appeared first on Coin Edition.