Discover the reasons behind the significant decline in Shiba Inu's price, attributed to the sale of 13 trillion tokens by large investors, and assess whether the current SHIB token burn will enhance its market value.
The price of $SHIB Shiba Inu has plummeted by 41.75% this year, reflecting trends seen in other well-known meme coins such as Dogecoin and Pepe. This downturn has occurred alongside persistent selling by major holders, who have offloaded more than 13 trillion tokens since the beginning of the year.
On a more optimistic note, the rate of SHIB token burning is increasing, and the price chart has developed a bullish harmonic pattern, potentially indicating a significant upward movement in the future.
Shiba Inu Price Crash Happened as Whales Sold 13 Trillion Tokens
The price of Shiba Inu has experienced a decline this year due to ongoing sales by large investors.
A probable explanation for these transactions is profit-taking, as the price surged by 210% from its lowest point in July of the previous year to its peak in November.
Data from Santiment indicates that the quantity of $SHIB coins held by these large investors has decreased from 743 trillion on January 5 to 730 trillion at present.
Whales are frequently regarded as more knowledgeable and adept investors compared to retail investors.
Typically, these investors tend to purchase assets when their prices are at a low point and sell when prices rise significantly.
Consequently, the current selling activity by whales indicates that the SHIB price is likely to decline further in the short term.
Will SHIB Token Burn Boost its Price?
The price of Shiba Inu is influenced by three significant potential catalysts: an increasing burn rate, a surge in Shibarium transactions, and a harmonic pattern observed on the weekly chart.
According to ShibBurn data, the daily burn rate for Shiba Inu experienced a remarkable increase of 3,145% on Monday, with 18.83 million tokens being transferred to an inaccessible address.
This burn indicates that over 410 trillion tokens have been eliminated from circulation since the token's launch.
An increasing burn rate is advantageous for a cryptocurrency as it diminishes the circulating supply, thereby creating a deflationary effect, in contrast to a token unlock which expands supply.
Additionally, the $SHIB price may gain from the expanding Shibarium network, which has successfully processed 1.129 billion transactions.
The number of addresses on the chain has risen to 206 million, establishing it as one of the most active layer-2 networks in the sector.
A highly engaged Shibarium network is beneficial for SHIB, as the fees generated within the network are converted into SHIB and subsequently burned.
SHIB Price Harmonic Pattern Points to a Rebound
The short-term price prediction for SHIB is expected to experience fluctuations due to ongoing whale sell-offs. Nevertheless, there is potential for the coin to recover in the long run, as it has established a unique harmonic pattern on the weekly chart.
The XA movement took place from March to August of the previous year, followed by the AB movement in December.
Currently, it has declined to the C point at $0.000010. If this pattern proves effective, the CD segment could elevate it to the anticipated 2024 peak of $0.00004552.
Importantly, Shiba Inu's price has created a double-bottom pattern at the $0.00001090 level, which serves as an additional catalyst.
A double-bottom consists of two support levels and a neckline, which in this instance is positioned at $0.00003310.
A decline beneath the support level of $0.00001090 will negate the XABCD and double-bottom patterns, indicating a potential for further decline. This decrease could expose the Shiba Inu price to a fall towards $0.0000050.
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