NEW DELHI (CoinChapter.com) — Shiba Inu (SHIB), a meme-inspired cryptocurrency, has increased its price by over 9% in the past week. This comes after the token had struggled for most of 2022, unable to regain the high prices it saw during the previous year’s crypto frenzy. However, recent cryptocurrency burns initiated by the Shiba Inu team seem to be turning investor sentiment positive again.
Over three days earlier this month, the developers behind the Shiba Inu ecosystem burned around $1.2 million worth of SHIB tokens. These tokens were accumulated from fees on the recently launched layer-2 network Shibarium. The tokens are effectively taken out of circulation by sending the fees to a dead wallet address.
Heavy Accumulation and Movement to Private Wallets
On-chain data analytics firm IntoTheBlock revealed that long-term SHIB holders transferred 4.8 trillion tokens into their wallets across several transactions. Over the past week, inflows into large wallets (holding between $100K and $10M worth of SHIB) have increased by 375%. At the same time, outflows from these large holders have decreased by 60.4%. This indicates that whales have been taking tokens out of circulation on exchanges and moving them into private storage wallets.
With prices rising and fewer tokens available on exchanges for trading, sell-side pressure is reduced, potentially allowing the rally to continue. Some analysts think if token burning continues and retail interest returns, SHIB could attempt to gain another zero past its decimal point in the coming months.
Uncertainty Around Continued Momentum
Despite the recent price surge, it is uncertain if Shiba Inu can sustain its momentum in the future. Over the past few weeks, Shiba Inu price has seen minor pullbacks, with a 1.8% correction in daily charts. It declined by 0.6% over 14 days. The token-burning activity that helped spur the rally has slowed down drastically. According to the SHIB’s burn tracker, burning activity has dropped by 61%.
According to cryptocurrency exchange Changelly, SHIB may gain another zero past its decimal point by late December. However, in 2023, SHIB has struggled to capitalize on positive ecosystem developments like the launch of its layer-2 network, Shibarium. Token adoption and real-world usage also lag behind investor hype and expectations.
Nevertheless, as one of the most popular meme-inspired crypto projects, SHIB remains well-positioned to ride any future bull market. Some analysts predict the next major crypto run will occur in 2024, which could see SHIB prices surge if retail enthusiasm returns.
However, hype and developer updates will need to pick up again for such exponential growth. Although still down significantly from its all-time high, this latest accumulation and token-burning bout indicates long-term investor interest in the Shiba Inu ecosystem. The coming year will determine whether the memecoin can transition back into a hot crypto commodity after its massive 2021 breakout.
