Shiba Inu (SHIB) On-Chain Activity Disappears, and Reason Is Unclear

The Shiba Inu (SHIB) token, once a hotbed of frenzied on-chain activity, is currently facing a cryptic slump. Data indicates that the burn rate — a mechanism where tokens are sent to an inaccessible wallet to reduce supply — has flatlined to 0%.

From a technical analysis standpoint, SHIB appears to be forming an ascending triangle pattern on the daily chart, characterized by a flat upper trendline that serves as resistance and a rising lower trendline acting as support.

This pattern is traditionally seen as a bullish indicator and typically resolves with an upside breakout. For SHIB, the upper trendline of the triangle sits near the $0.0000096 level. A decisive close above this resistance could potentially catalyze a surge in price, as it would signify the end of consolidation and the start of a new upward trend.

However, the dichotomy between the chart pattern and the on-chain data presents a riddle. While the technicals suggest an impending move to the upside, the lack of on-chain activity raises questions about the driving force behind any potential price surge. The burn rate’s standstill is particularly perplexing, as token burns are often used to create deflationary pressure and can be a sign of a vibrant ecosystem.

One hypothesis for the drop in on-chain activity could be a shift in investor sentiment, possibly due to a broader market downturn or emerging narratives within the crypto space that have drawn attention away from meme tokens like SHIB. Additionally, the community-driven aspect of SHIB’s burn mechanisms may be experiencing a lull, reflecting a possible decrease in community engagement.

It is also worth considering external factors such as regulatory scrutiny or platform-specific issues that could be impacting transaction volumes. Without a clear catalyst for the on-chain activity decline, guessing is our only option right now.

Source