Shiba Inu, the so-called Dogecoin rival, has sparked a major debate in the crypto space after experiencing a significant price drop. The decline in SHIB’s value coincides with a drop in the weekly burn rate, raising concerns for the meme coin in the broader crypto market.
Meme Coin Frenzy and Shiba Inu’s Rise
The meme coin created a frenzy in the crypto world recently, with its price surging remarkably in parallel with a broader meme coin rally. However, the token has been on a downtrend in recent days, falling below $0.00003 and risking a break below the $0.00002 support level.
A Closer Look at Shiba Inu Burns
Despite the community burning over 339 million tokens last week, as per data revealed by burn tracker Shibburn, SHIB’s weekly burn rate has declined by 58.96%. This decline mirrors SHIB’s weekly price drop of 7.60%.
The meme coin community has continued to burn significant amounts of SHIB over the past week. However, this stands in contrast to the falling price of SHIB, as the coin remains on a downtrend.
On the other hand, the SHIB burn rate has increased by about 100% in the last 24 hours, with 33 million meme coins burned. However, the broader market continued to exert a bearish influence on the meme coin, as market charts indicated bears were in control.
Shiba Inu Price Slumps
At the time of writing, the Shiba Inu token price had dropped by 0.06% in the last 24 hours. It is currently trading at $0.00002715. While the token’s charts showed a gradual upward momentum for the meme coin at the time of writing, today’s burn increase potentially continued to fuel market dynamics speculation.
Looking at the broader trend for SHIB in the market, market data suggests that there is potentially more downside for SHIB, coupled with a weekly drop of about 7%. Derivatives data showed a 1.61% decline in SHIB’s open interest, while volume fell by 4.41%. This contributed to Shiba Inu’s downtrend, indicating a decline in new money entering the market as well as a decrease in market activity.
Meanwhile, the OI-weighted funding rate continued to decline, reaching 0.0198%, further reflecting the downtrend in SHIB as it signaled a significant decline in investor sentiment for taking longer positions.
The RSI stood at 53, indicating neither an overbought nor an oversold zone for the token. However, with the downtrend observed over the past week, coupled with the decline in OI and volume, the potential for further price declines remains, supported by weakening market momentum witnessed after a meme coin rally.