quick take:
- The burn mechanism of Shiba Inu persisted in alleviating inflationary pressure on the meme coin.
- The on-chain metrics indicated renewed confidence among SHIB holders.
In the last 48 hours, the Shiba Inu (SHIB) community witnessed a significant event as a staggering 52 million SHIB tokens were burned. This move has sparked discussions among crypto enthusiasts, particularly regarding its potential impact on market dynamics and investor sentiment.
The burning of such a substantial number of SHIB tokens raises questions about its implications for bullish investors. While the immediate effect on price movements remains to be seen, the act of burning tokens typically reduces the overall supply in circulation. This reduction in supply could potentially lead to increased scarcity and, in turn, drive up demand, potentially benefiting bullish traders.
Analyzing the trends related to supply scarcity and accumulation.
Examining the supply scarcity and accumulation trends involves analyzing various on-chain metrics to understand the dynamics of token distribution and investor behavior within the Shiba Inu (SHIB) ecosystem. This process entails delving into data such as wallet balances, transaction volumes, and token distribution patterns to gain insights into how tokens are being circulated, accumulated, or redistributed among holders.
Supply scarcity refers to the availability of SHIB tokens in circulation relative to demand. By analyzing metrics related to token circulation and distribution, such as the number of tokens held by different wallet addresses and the rate of token transfers, analysts can assess the degree of scarcity in the SHIB market. A decrease in the overall supply of tokens, whether due to token burns or increased hodling behavior among investors, may indicate growing scarcity and potential upward pressure on prices.
Accumulation trends, on the other hand, involve tracking patterns of token accumulation or accumulation behavior among investors. This includes identifying wallets that are consistently accumulating SHIB tokens over time and analyzing the motivations behind such accumulation. Accumulation trends can provide insights into investor sentiment, confidence in the project, and expectations for future price appreciation.
By examining supply scarcity and accumulation trends, analysts can gauge the overall health and sentiment of the SHIB ecosystem. Decreasing token supply coupled with a consistent pattern of accumulation by investors may signal growing confidence and optimism in SHIB’s long-term prospects. Conversely, if supply scarcity remains low and accumulation trends are stagnant or declining, it may suggest waning interest or uncertainty among investors.
AMBCrypto also assessed additional pertinent metrics on Santiment. The MVRV ratio has surged into positive territory in the last two weeks, indicating the profits accumulated by SHIB.
Holders found themselves in a profitable position once more, albeit not reaching the highs seen in December.
The average coin age experienced a decline in early February, but recent days have seen this metric gradually rise again.
If this upward trend persists, it would strongly indicate accumulation among holders, further bolstering bullish sentiments.
AMBCrypto’s assessment of the distribution of the token supply contributed to concerns about ongoing selling pressure. While the number of holders with 0-100k SHIB increased, holders with 100k-1B SHIB decreased since December.
The absence of accumulation over the past two months might be considered a minor cause for concern.
Key observations from the movement in prices.
Key observations from the movement in prices encompass a thorough analysis of various factors influencing the fluctuation of asset prices in a particular market. This analysis involves examining trends, patterns, and significant events to glean insights into the underlying dynamics shaping price movements.
One crucial aspect of observing price movements is to identify trends and patterns over different timeframes, such as short-term, medium-term, and long-term. This entails analyzing price charts to identify patterns like uptrends, downtrends, consolidations, or reversals, which provide valuable information about market sentiment and potential future price directions.
Additionally, monitoring trading volume alongside price movements is essential for validating the strength of trends and confirming potential trend reversals. High trading volume during price movements often indicates strong market participation and conviction, while low volume may signal weak momentum or indecision among traders.
The one-day chart of Shiba Inu instilled some optimism among bullish investors. Both the market structure and the RSI indicated that buyers were dominating. Concurrently, the OBV also exhibited a gradual upward trend over the preceding two weeks.
This indicated increased buying pressure, potentially driving SHIB prices upwards. As long as the token maintains its position above the $0.00000927 threshold, there’s an anticipation for it to surpass the recent peaks at $0.00001195.
