Shiba Inu Struggles to Hold Ground as Burn Rate Plummets 63%, Undercutting Deflation Narrative

Shiba Inu (SHIB) remains under downward pressure despite a minor bounce from overnight lows, as a sharp 63% decline in its daily burn rate casts doubt on the strength of its deflationary token model.

SHIB briefly dropped to $0.00001234 during the Asian session before recovering to $0.00001265, yet the broader bearish pattern remains intact. Technical trendlines tracing the May 12 and May 23 highs alongside the May 17 low continue to define the prevailing downtrend.

The daily burn rate—which tracks the number of tokens permanently removed from circulation—fell drastically, a move that weakens one of SHIB’s core value propositions: supply reduction. Meanwhile, 24-hour trading volume jumped 78%, indicating elevated activity despite weak deflation momentum.

Key Observations:

• Demand Cluster: On-chain data shows a high concentration of holders between $0.000012 and $0.000013, reinforcing this as a potential support band where price could stabilize or see reactive buying.
• Localized Support: Buyers stepped in near $0.00001236, driving a strong intraday recovery supported by a clear uptick in volume—suggesting renewed short-term interest.
• Volume Surge: A sharp spike in trading activity occurred at 08:02 UTC, with over 14.9 billion tokens exchanged, pushing SHIB to its daily high.
• Consolidation Signal: Price behavior in late-session trading suggests potential sideways movement, signaling indecision before the next breakout or breakdown.

While SHIB’s long-term deflation thesis hinges on consistent token burns, the recent slowdown raises questions about sustainability. Unless burn activity rebounds, the price may continue to face resistance within its current technical setup.