Over 3.3 million SHIB tokens were burned in the last 24 hours, reducing the circulating supply and intensifying scarcity.
Buying activity has surged, especially among U.S. investors, as spot and derivatives markets show renewed bullish interest.
Despite a recent price drop of nearly 3% and a weekly decline of 16%, market sentiment around SHIB is turning optimistic.
The burn rate has spiked by more than 120% this week, setting the stage for a potential supply squeeze.
U.S. exchanges like Kraken and Coinbase reveal a strong bullish tilt among American traders, even as global sentiment remains mixed.
Technical indicators in the derivatives market point to a build-up of long positions, hinting at expectations of a price rebound.
Supply Shock: The Impact of SHIB Token Burns
In the past day, the Shiba Inu ecosystem witnessed a dramatic reduction in its token supply, with 3,333,333 SHIB permanently removed from circulation. This event is not isolated; it’s part of a broader weekly trend that has seen the burn rate soar by 120.3%. The total supply now stands at just over 589 trillion tokens, a figure that continues to shrink as the community intensifies its burn efforts.
This aggressive reduction in available tokens is more than a symbolic gesture. By decreasing the circulating supply, the likelihood of a supply squeeze increases, which can act as a powerful catalyst for upward price movement. Historically, such supply contractions have often preceded bullish runs in the crypto market, as scarcity drives demand and investor interest.
Market Response: Buyers Step In
The market has not been slow to react to these developments. After a period dominated by selling, buyers have returned with renewed vigor, particularly in the spot market. In just 24 hours, spot traders snapped up $1.55 million worth of SHIB, signaling a shift in sentiment and a willingness to accumulate at current price levels.
This buying momentum is not limited to spot trading. In the derivatives market, the Open Interest Weighted Funding Rate has climbed to 0.0259%, indicating a growing preference for long positions. This metric, which blends open interest with funding rates, provides a nuanced view of trader sentiment and suggests that futures traders are positioning themselves for a potential rally.
U.S. Investors: A Bullish Force
A closer look at trading activity reveals that U.S. investors are playing a pivotal role in the recent surge of optimism. While the global market remains somewhat divided—47.09% bullish versus 52.91% bearish—American traders are leaning decisively bullish. On Kraken, a striking 72.13% of traders are betting on price increases, while Coinbase shows a more balanced but still optimistic split.
This regional divergence in sentiment is significant. U.S.-based exchanges often set the tone for global trading, and their bullish stance could help tip the scales in favor of a broader market rally. The enthusiasm among American investors may also reflect a growing appetite for risk and a belief in SHIB’s long-term potential, even as the asset faces short-term headwinds.
Navigating Market Volatility: The Road Ahead for SHIB
Despite the recent uptick in buying activity and the dramatic reduction in supply, SHIB’s price has struggled to gain traction, falling nearly 3% in the last 24 hours and posting a 16% loss for the week. This disconnect between market sentiment and price action highlights the complexity of crypto markets, where technical factors, investor psychology, and macroeconomic trends all intersect.
For SHIB to sustain a meaningful rally, exchanges with higher liquidity—such as OKX—will need to see a widening gap between long and short positions. This would signal a decisive shift in momentum and could attract additional capital from traders seeking to ride the next wave higher. Until then, the market remains in a state of flux, with both risks and opportunities on the horizon.
Conclusion
Shiba Inu’s recent token burn has set the stage for a potential supply-driven rally, with U.S. investors leading the charge in renewed buying activity. While the asset has faced notable price declines, the combination of reduced supply, bullish sentiment in key markets, and growing long positions in derivatives suggests that SHIB could be poised for a turnaround. As the market digests these developments, all eyes will be on whether this momentum can translate into a sustained price recovery, or if further volatility lies ahead.
