The value of Shiba Inu (SHIB), the second-largest meme coin in terms of market capitalization, has declined by 9% over the past week, based on data from Coingecko.
Despite this recent performance, there are several reasons suggesting a potential turnaround in the near future.
The Burn Rate
The Shiba Inu team introduced a burning mechanism in 2022 to reduce the large circulating supply of the coin. This process involves sending SHIB to a null address with each transaction, which promotes scarcity and could potentially increase the value of the remaining tokens as long as demand remains stable or increases.
Recent data shows a significant increase in the burn rate, with around 60 million tokens burnt in the last 24 hours, a 500% surge compared to previous figures. Approximately 41% of the initial supply has already been burned, leaving around 583 trillion SHIB tokens in circulation currently.
Abandoning Exchanges
Another noteworthy aspect is the SHIB exchange netflow, indicating a shift from centralized platforms to self-custody methods as outflows have exceeded inflows in the past month. This shift can be considered as bullish for the price as it reduces immediate selling pressure.
A similar trend was observed in early March when SHIB’s value experienced a significant increase in a short span of time.
Open Interest
SHIB’s open interest surpassed $30 million last week, reaching a one-month high, which suggests increased market participation and often precedes heightened volatility and significant price movements.
While not always indicative of positive outcomes, a rise in open interest typically foreshadows a substantial market shift, potentially favoring SHIB bulls if the overall market continues its uptrend.
Shibarium’s Progress
Shibarium, a layer-2 scaling solution introduced approximately a year ago, has achieved multiple milestones by processing over 400 million transactions and generating more than 5.5 million blocks.
Shibarium aims to enhance the Shiba Inu ecosystem by reducing transaction costs, improving speed, and boosting scalability. Continued progress in Shibarium could positively impact the price of SHIB, according to some industry experts.
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