Shiba Inu (SHIB) continues its downward trend despite a brief recovery from overnight lows. The sharp 63% decline in its daily burn rate raises concerns about its deflationary outlook.
At the time of writing, SHIB trades near $0.00001265, recovering from a low of $0.00001234 during Asian trading hours. However, the downtrend remains intact, supported by trendlines connecting recent highs on May 12 and May 23, and the May 17 low.
The daily burn rate, which measures the number of SHIB tokens permanently removed from circulation each day, has fallen significantly. This reduction threatens progress toward SHIB’s deflationary tokenomics, despite a 78% surge in trading volume.
Token burns are commonly used to reduce supply over time, aiming to increase scarcity. The slowdown in burns thus poses a challenge for SHIB’s price sustainability.
On-chain data indicates potential support zones between $0.000012 and $0.000013, where many investors hold tokens with a cost basis, possibly creating strong price defense and increased trading activity.
Technical observations show support near $0.00001236, backed by strong buying volume and increased trading activity exceeding 14.9 billion tokens around 08:02 UTC. This surge helped SHIB reach session highs and suggests possible accumulation.
Price stabilization during the final hours hints at consolidation before the next move. Despite this, SHIB remains below its 100-day simple moving average (SMA), maintaining its bearish posture.