SHIB token burn rates seem to be increasing on the Shiba Inu network. The current number of Shiba Inu burn trackers is quite surprising. However, the data shows that this is due to the degenerative performance of the SHIB engraving machine.
On-chain data shows that the SHIB burn rate has seen a massive increase of 1682.07% in the last 24 hours. This is the largest percentage increase in burn rate on the SHIB network in recent months.
Why does the SHIB burn rate increase?
In detail, the number of tokens burned on the Shiba Inu network did not exceed 1 million SHIB on January 26. Yesterday’s amount was one of the lowest numbers of assets that developers have burned on the network. Thus, the apparent spike in burn rate could be due to a defect in the SHIB burning machine yesterday.
According to analysts, this percentage spike was not triggered by increased network activity. Also, this did not represent a large number of tokens actually burned.
Token burns help reduce the number of coins in circulation. This helps to increase the scarcity of an asset and eventually increase the price of the token when the increase in supply brings it down.
For example, on January 17, burning the SHIB token jumped 613% in 24 hours, and the coin beat traders’ bearish expectations, rising above 20% on the day. However, a price surge has not accompanied the recent increase in the rate of token consumption.
Also, some SHIB whale activity indicates that major investors have lost confidence in the meme coin as many whales continue to move pieces of Shiba Inu positions on exchanges.
🚨 🚨 3 312 307 240 798 #SHIB (38,257,148 USD) transferred from an unknown wallet to an unknown wallet
— Whale Alert (@whale_alert) January 26, 2023
This could mean that short-term traders do not believe that the asset could break above the resistance level, which would help them earn profits.
New SHIB whales emerge – what next?
While some whales are selling their tokens, a new address is buying the dip, accumulating large amounts of SHIB tokens, and maybe waiting for the next bull market. The data shows that a new crypto wallet became a Shiba Inu whale address on Thursday, January 26, 2022.
The new wallet became a whale address after receiving 3.3 billion SHIB worth around $38.9 million. Etherscan revealed that the sending address moved funds from different wallets before transferring the tokens to the recipient, now the newest SHIB whale. This decision further confirms our suspicion that small investors are abandoning their positions.
According to the blockchain whale tracker, whale alert, the wallet also received 1 billion PAW tokens within minutes of swiping the SHIB token. With the current balance, the new whale is now the 30e-the largest holder of SHIB.
This recent accumulation came after the 26e-largest SHIB holder swept 150 billion chips in his wallet. The token sweep happened across four transaction clusters in three hours on January 23.
So, while short-term investors might sell their positions due to lower SHIB prices, some might accumulate in anticipation of future gains from the upcoming Shibarium launch.
Shiba Inu is currently trading at $0.00001188 with an increase of 1.28% over 24 hours and a price increase of 0.2% over 7 days. Additionally, the meme coin saw a 22.1% 14-day price surge and a 41.4% 30-day surge.
Featured image from Pixabay Kevin_YChart from Tradingview