Shiba Inu cryptoShiba Inuprice could plummet 50% as Shibarium fees, burn rate drop

 Shiba Inu cryptoShiba Inuprice could plummet 50% as Shibarium fees, burn rate drop

Shiba Inun price has collapsed by over 35% from its December high and faces further downside threats as the burn rate and Shibarium fees continue to decline.

According to Shibburn, SHIB’s burn rate has continued to fall, which could significantly effect the token’s performance in the near term. In the last 24 hours, 8.73 million tokens were burned - a 71% decline from the previous day.

A potential reason for this huge reduction is the weak functioning of the Shibarium ecology. Data from ShibariumStats shows that the number of active accounts on the network has decreased to just 1,250, a surprisingly tiny figure for a network with significant popularity.

Additionally, the average transaction fee on Shibarium has decreased to 0.00023 BONE, down from December’s peak of 0.00045. As a result, the total BONE spent on petrol expenses has fallen to 1,715 BONE, equivalent to roughly $771.

Shibarium’s performance is vital for SHIB’s pricing since the network plays a key part in token burning. A percentage of the BONE fees collected on Shibarium is converted into SHIB and subsequently burned, limiting the token supply.

Meanwhile, data from Nansen suggests that smart money investors are lowering their exposure to SHIB. The number of smart money addresses holding SHIB has plummeted to 25, down from roughly 40 in November. This move may be due to Shiba Inu’s underperformance relative to other meme coins, forcing investors to pivot to alternatives like Fartcoin and ai16z.

Shiba Inu coin price to tumble some further

The daily chart implies that SHIB’s stock could witness further drops. The token has decreased from a high of $0.000033 in November to $0.00002150 as of today.

SHIB has broken below the 50-day and 100-day moving averages. More importantly, it is producing a bearish flag chart pattern, characterized by a steep downward move followed by a consolidation phase within a rectangle. This pattern often predicts a strong bearish breakout. In this event, SHIB might drop to the next support level at $0.00001082, which would be a 50% loss from current values.

On a more encouraging note, there are indicators that SHIB is also developing a cup-and-handle pattern. If this bullish pattern plays out, the recent downturn may be part of the handle portion. In that case, SHIB might retest the top boundary of the cup before starting on further advances.