Shiba Inu Token Burn Fails to Boost Price in April
The Essentials at a Glance
Despite the burning of over 1.6 billion Shiba Inu (SHIB) tokens in April, a process that reduces the number of tokens in circulation to increase value, a positive price development did not occur. This measure did not lead to the hoped-for price increase, and the number of active addresses also significantly decreased. What are the reasons for this, and what does it mean for the future of SHIB?
Extensive Token Burning without Price Increase
In April, over 1.6 billion SHIB tokens were burned in 204 transactions, bringing the total number of burned tokens to 2.3 million. Despite this significant amount of destroyed tokens, a positive effect on the price did not occur. The analysis shows that the price of SHIB continuously fell in April, starting with a price of about $0.000028 and a decline of over 7% by the end of the month.
Price Trend and Market Reaction
The price development of SHIB in April was disappointing. The price began to fall and broke through the short-term support line, leading to a continuous price decline. By the end of the month, SHIB had lost more than 26% of its value. This development raises questions about why the token burning did not have the desired effect on the price.
Decline in Active Addresses
Another concerning sign was the significant decrease in the number of active SHIB addresses. While an average of about 280,000 active addresses was recorded in March, this number dramatically fell to around 125,000 in April. This indicates a declining interest and lower market participation.
Positioning in the Memecoin Market
Despite the disappointing price development and the decline in market participation, SHIB remains the second-largest memecoin by market capitalization. With a market capitalization of over $12.4 billion, SHIB surpasses the market capitalization of the next seven memecoins combined. This highlights SHIB’s still strong market position.
Our Assessment
The recent developments at Shiba Inu show that token burnings alone are not enough to positively influence the price, especially when market interest and participation decline. Additional factors such as increased use cases, partnerships, and market participation may be needed for future price increases. Investors should closely monitor these developments and adjust their strategies accordingly.
Sources: Santiment, CoinMarketCap
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