Shiba Inu is very volatile as its burn rate and Shibarium transaction fees continue to decline.
Shiba Inu (SHIB) fell to $0.000022, down 33% from its highest level this month.
At last check on Saturday, the Ethereum meme coin was up at least 3.5%. See below.
Why did Shiba Inu retire?
This decline is mainly due to continued weakness and declining volumes in the cryptocurrency sector.
The Shiba Inu’s fundamentals have also deteriorated in recent days. First, the Shibarium network is not growing like it was a few months ago.
According to Shibarium Scan, the number of new accounts on Friday was only 44, far lower than the 3,400 on December 4. The cumulative number of accounts increased to 222,000, while active accounts fell to less than 3,000.
Shibarium’s average transaction fees continued to decline after peaking at 0.0004 earlier this month. Its total value locked also dropped to $3.55 million, from over $6 million on December 7.
These numbers are important to Shiba Inu because Shibarium is its Layer 2 network and its success matters. Additionally, Shibarium fees, which come in the form of BONE, are usually converted to SHIB and then burned. Burning is a process by which cryptocurrencies are moved to an inaccessible wallet.
These numbers likely explain why the Shiba Inu burn rate dropped more than 98% in the last 24 hours to 507,123 SHIB. This burn brought Shiba Inu’s circulating supply to 584 trillion tokens, well below its total supply of over 999 trillion.
Shiba Inu could lose key support
The daily chart shows that SHIB price fell sharply after peaking at $0.000033 in December. It fell and moved slightly below the 50-day moving average.
There are signs that the coin is forming a bearish pennant chart pattern, consisting of a vertical line and a triangle. This trend often leads to more disadvantages.
On the positive side, Shiba Inu remains above the ascending trendline that connects the lowest swings since August. Since then, it has failed to fall below that level at least six times, giving hope for a rebound.
A fall below this support will be a sign that the bears have prevailed, leading to an even further decline, potentially to $0.00001590, its October 25 low.
