Shiba Inu (SHIB) Burn Rate Explodes by 2,000% Weekly: Further Price Rally Incoming?

TL;DR

• SHIB’s recent price pump coincides with a substantial resurgence of the project’s burning program.
• Despite strong fundamentals, Shiba Inu’s RSI is nearing 70, indicating it may be overbought and could face a brief correction.

More Gains Ahead?

Shiba Inu (SHIB) has followed the impressive resurgence of the cryptocurrency market over the past week, posting a price increase of around 17%. Its market capitalization exceeded $8 billion, solidifying the asset’s position as the second-largest meme coin.

SHIB Price, Source: CoinGecko

Data shows that the team and community have burned more than one billion SHIB in the past seven days, representing a 2,080% surge compared to the prior week. The ultimate goal of the burning mechanism is to reduce the overall supply, making the asset scarcer and potentially more valuable (assuming demand remains constant or heads north).

The program’s revival isn’t the only sign suggesting SHIB could see further short-term gains. Over the past month, exchange netflows have remained largely negative, indicating a shift from centralized platforms to self-custody – a development that reduces the immediate selling pressure.

SHIB Exchange Netflow, Source: CryptoQuant

The solid performance of Shiba Inu’s layer-2 scaling solution is also noteworthy. Daily transactions processed on the network have been consistently in the millions over the last several weeks, while the total number of blocks recently surpassed the milestone of 12 million.

Shibarium fosters the development of the Shiba Inu ecosystem by reducing transaction fees and improving speed, and according to some industry participants, its further advancement could positively impact the price of the meme coin.

Last but not least, we will touch upon the rising public interest in SHIB. The Google searches involving the cryptocurrency have climbed to their highest level in two months, suggesting a new wave of retail investors might enter the market.

SHIB Searches, Source: Google Trends

The Risk of Correction

Despite the multiple bullish elements, a few metrics hint that SHIB’s rally might be briefly interrupted soon. An example is the Relative Strength Index (RSI), which measures the speed and magnitude of price changes. 

Currently, the ratio hovers around 70, indicating that the valuation has increased too rapidly over a short period and may be due for a pullback.

SHIB RSI, Source: CryptoWaves