Shiba Inu price crashed by over 3% on Thursday, even as the burn rate skyrocketed by over 816%.
Shiba Inu (SHIB) dropped to $0.00001212, down by 25% from its highest level in July. It is also sitting at a crucial support level, putting it at risk of a strong bearish breakout.
SHIB price plunged even as the burn rate rose because of the performance of the crypto market. Bitcoin and most altcoins were deeply in the red as traders waited for the upcoming non-farm payroll data.
The second reason is that there is no direct correlation between a coin’s burn rate and its price action. For example, SHIB has plunged by double digits despite burning over 410 trillion tokens since its inception.
Additionally, while an 816% increase is a big one, the number of incinerated tokens was 5.3 million. In SHIB terms, these tokens were worth just $63, a tiny amount for a cryptocurrency valued at over $7 billion.
One reason why the burn rate has been negligible is that Shibarium, its layer-2 network, is not generating any money. Its network fees in the last 24 hours were just 40 BONE, worth just $6.
Shiba Inu price technical analysis
The daily chart shows that the SHIB price has pulled back in the past few weeks. It is trading at $0.00001210, an important level it has failed to break below several times since August.
SHIB has remained below the 50-day and 100-day Exponential Moving Averages. It also remains below the descending trendline that connects the swing highs in May.
Therefore, the coin will likely have a strong bearish breakout, potentially to the year-to-date low of $0.000010, down by 15% from the current level.
