Why is the burn rate of SHIBA INU dramatically increasing, but the price is not experiencing an increase?
Recently, we have observed impressive growth in the amount of SHIB tokens being burned, with an increase of over 100,000% in just 24 hours. This is remarkable, but the price has not shown a significant rise. What is the reason behind this? Below, we present a concise analysis:
1. Burning decreases availability but does not ensure an increase in demand. The process of burning tokens means there is a lesser amount of SHIB in the market. However, for the price to rise, it is necessary for demand to increase or at least remain constant. If there are no buyers, the price may not react immediately.
2. Market speculation can affect the effects of the burn. Some investors might choose to sell with the expectation of quick profits in light of the burn news, which could exert temporary negative pressure on the price.
3. There are various elements that simultaneously affect the price. The general perception of the cryptocurrency market, macroeconomic factors, and significant sales can keep the price low, even in a situation of decreasing supply.
4. The effects of the burn are not immediately reflected in the price. The reduction in supply may support the price increase in the medium and long term, although not always instantaneously. It may take several days or weeks for the impact of the burn to become evident.
Conclusion: The considerable burning of SHIB represents a positive aspect for its tokenomics and contributes to limiting the supply. However, for the price to increase, it is essential to have strong demand and favorable market conditions. Therefore, patience and close monitoring are essential.
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