Shiba Inu price fell towards $0.000007 on Monday as selling pressure intensified in the markets. However, as Shibarium network usage stabilizes, on-chain data reveals that the SHIB token burn rate also increases. Will this positively impact SHIB prices amidst the prevailing bearish trend? Crypto analyst Ibrahim Ajibade is looking for an answer to this question.
Shibarium network transactions increased by 175% this month
As you follow from Kriptokoin.com, Shibarium had a shaky start due to market FUD and network problems. However, following this, it is currently experiencing steady growth. Official ShibariumScan data shows that only 73,600 transactions were processed on September 1. But it has grown steadily since then, reaching 202,900 transactions on September 11. Specifically, this represents a dazzling 175% growth in network activity in less than two weeks.
Shiba Inu-Shibarium Daily Operations. Source: ShibariumScanThe steady increase in the number of daily transactions is a positive signal for several reasons. First, it indicates wider adoption and increased demand for services and tokens hosted on the network. More importantly, it reveals that the efficiency and stability of the Shibarium network has increased. According to pre-launch claims made by the Shiba Inu team, if this upward trend continues, it could accelerate SHIB’s burn rate. And if it matches demand, it’s possible it could ultimately trigger an increase in the SHIB price.
SHIB burn rate increased in correlation with Shibarium network activity
Meanwhile, the SHIB token burn rate has also increased significantly this month. This confirms the Shiba Inu team’s claim. According to CryptoQuant data, Shiba Inu’s daily token burns fell to a two-month low of 10.06 million SHIB on September 1. But as Shibarium network activity has recovered, the burn rate has since increased by 700%, reaching 70.3 million at the close of September 11.
SHIB Daily Token Burn. Source: CryptoQuantToken burning is a mechanism that permanently removes a certain amount of a cryptocurrency from circulation. It usually involves sending tokens to an address where they cannot be spent or withdrawn. The act of cremation reduces the total circulating supply of Shiba Inu. Therefore, it is possible that a persistent increase in the token burn rate could raise prices if demand remains constant.
The correlation between Shibarium draw growth and the recent increase in SHIB burn rate between September 1 and September 12 establishes a link between both trends. If this claim is true, it could reaffirm investors’ confidence in the Shiba Inu project. Additionally, amid the ongoing downtrend, SHIB may help support price support levels.
Shiba Inu price prediction
The key on-chain indicators above suggest that SHIB will find sufficient demand for the $0.000007 support zone. This is vividly demonstrated by the In/Loss Around Price data, which summarizes the purchase price distribution of current Shiba Inu holders. The data highlights that 57.940 million investors purchased 19.8 trillion SHIB tokens at a maximum price of $0.000007. If the token burning rate increases, it is possible for them to maintain their positions. They are also likely to trigger an early SHIB price recovery. However, if the bears push this support level aside, it is possible that Shiba Inu price could decline further towards $0.000005.
Shiba Inu IOMAP data. August 2023 | Source: IntoTheBlockBut if the FUD in the meme-coin market subsides, the bulls could potentially force a major rally towards $0.000010. However, 429,150 addresses had purchased 301.5 trillion SHIB at a minimum price of $0.000008. And if they choose to sell, it’s possible the Shiba Inu price will drop again. However, if this resistance level gives way, it is possible for SHIB to quickly reclaim $0.000010.
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