Shiba Inu's deflationary mechanism saw a significant spike in activity, burning over 6.8 million SHIB tokens in a 24-hour period. According to data from tracking platform Shibburn, this represented a 44.45% increase in burn activity. The event coincided with a short-term price rebound for the meme coin, with SHIB gaining approximately 4-5% to trade around $0.00000621 after hitting a local low of $0.000005655.
The burn mechanism, which involves sending tokens to inaccessible 'dead' wallets, is designed to reduce the circulating supply and potentially support price growth through supply-demand dynamics. However, the latest activity has reignited debate about its long-term efficacy. Critics point out that despite the burn, over 585 trillion SHIB tokens remain in circulation, making the impact of burning millions of tokens largely symbolic in the face of such an enormous supply.
Historical data indicates that burn spikes do not guarantee price appreciation, with SHIB having conducted previous burns without a noticeable market response. Over the past year, SHIB has lost more than 51% of its value. The burn activity is inconsistent and largely depends on discretionary community actions, though the Shibarium Layer-2 network is working to integrate burn mechanisms into its transaction fee structure to automate the process.
From a technical perspective, SHIB's recovery lacks strong volume, and the asset remains in a longer-term downtrend, trading below its 50-day Moving Average. Traders are watching key resistance at $0.00000650 and support at $0.00000545. The news also highlighted momentum in the broader meme coin sector, with projects like Maxi Doge ($MAXI) raising $4.6 million in its presale as investors seek alternatives.
