Shiba Inu recently launched a fierce token burning campaign, which has generated a lot of excitement within the SHIB army. Can this campaign help the price rally from its lower support levels, as many had hoped?
Despite their bearish undertones, meme tokens often carve out a strong niche in the cryptocurrency market, favoring gains and rallies. With the current developments centered around the Shiba Inu ecosystem, SHIB, the 2nd largest memecoin by market capitalization, is expected to move in the positive direction.
The question, for now, however, remains whether its recent developments can push SHIB price with some much-needed bullish momentum.
A SHIB burn until the price goes up?
The Shiba Inu Hodlers have been dreaming of a price rally since August 15, when the memecoin grew nearly 45% in just four days.
So last week, when supposed Shiba Inu founder and lead developer Shytoshi Kusama announced an aggressive token burn campaign, investors once again hoped for a rally.
As of September 22, a total of over 410 trillion SHIB have been burned on the initial supply, which is over 41% of the maximum total supply to date.
In the last 24 hours, at the time of this article’s layout and according to data from Shib Burn, a total of 11.7 million SHIB tokens have been burned through three transactions.
On September 21, there was a noticeable spike in the burn rate of the token, with a large amount of SHIB being sent to a dead wallet, causing the burn rate to spike by 1,500%. However, at the time of this writing, and as enthusiasm for the campaign waned, the burn rate dropped by 83%.
Looking at the long-term trend, it can be seen that a considerable amount of SHIB has been burned, which contributes to reducing the supply and thus to the health of the network. While this reduction in supply should have a long-term bullish effect, will the same be true for token demand?
Shiba Inu supply is dwindling, but what about demand?
Reduced supply of SHIB should ideally lead to a bullish effect on the token if demand increases. Network metrics showed a steady rise in daily new addresses, growing 1.85% over the past week. On average, approximately 1,600 addresses are created per day in September.
That said, apart from a few notable things in August, when 4,000 new addresses were created, consumer interest in SHIB did not lead to a major uptick.
Indeed, the euphoria of individuals favors the growth of the price when new entities enter the market. In the case of SHIB, in particular, its price increased in October 2021. Then, in February 2022, a spike in new addresses created led to a rise in price at the same time.
All this effort for nothing?
At the time of this article’s layout, the price of SHIB was near the $0.00001078 level, representing a gain of 3.04% on the day. Despite a long-term bullish outlook, the short-term action seems more or less dependent on the market.
Additionally, the supply and demand dynamics of Shiba Inu present crucial short-term price barriers before the asset can finally regain strength.
The indicator Global In and Out of Money, notably, showed that the next size barrier of SHIB supply is at the $0.000017 level, where 105,000 addresses hold over 450 trillion tokens. If the the bulls manage to push the price above this supply barrier, it could pave the way for further gains.
For now, the long-term support located at $0.00001050 has allowed the price of the SHIB not to fall further.
Data from IntoTheBlock also shows that over 75% of HODLers were out of line or at a loss at the time of layout. Overall, however, better dynamics between supply and demand could support the growth of Shiba Inu in the event of a spike in demand for this token.
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Shiba Inu: Price Prepares For Rally After 410 Trillion SHIB Burn – BeinCrypto
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