Shiba Inu (SHIB), one of the most recognized memecoins in the cryptocurrency space, caused a stir on U.S. presidential election day with a staggering 3,674% surge in its burn rate. This sudden spike in the burning of SHIB tokens, which are sent to inaccessible wallets to reduce supply and potentially boost the token's value, coincided with a notable increase in SHIB's price. But was it just a coincidence, or is there more to the timing?
SHIB’s burn mechanism has long been a core part of its strategy to reduce its circulating supply and potentially increase its value. In the 24 hours leading up to the election, over 53 million SHIB tokens were burned, including a single transaction that saw nearly 29 million tokens sent to a dead wallet. The massive surge in burn activity contributed to a 6% increase in SHIB’s price on the day of the burn. However, despite this surge, SHIB’s price remains stuck in an 8-month slump, with its value trading at $0.000018 as of press time—well below the $0.000030 mid-range level it once reached.
While the burn strategy has generated some excitement, it is clear that routine burns alone may not be enough to trigger a breakout for SHIB. To see any meaningful upside, SHIB needs to break above the $0.000020 threshold, and possibly retest its prior highs. This raises the question: what will push SHIB past its current stagnation?
The memecoin market has been buzzing recently, largely due to the renewed interest in Dogecoin (DOGE), which posted a significant 12% weekly gain. DOGE’s recent surge is widely attributed to the influence of Elon Musk, who has consistently supported the token, and the broader market’s optimism following Bitcoin's (BTC) new all-time high. DOGE's performance has drawn attention, especially as it broke the $0.20 mark for the first time since April.
However, what’s notable about this cycle is that it differs from the typical “supercycle” where multiple memecoins, like Popcat (POPCAT) and dogwifhat (WIF), rise in tandem. In this cycle, those once-popular tokens have largely posted losses, signaling a potential shift in investor sentiment. Instead, Dogecoin has stood out as the dominant force in the memecoin market.
Historically, Shiba Inu and Dogecoin have often moved in sync, with one memecoin’s momentum often sparking activity in the other. As DOGE surged by 20% during the same period SHIB’s burn activity spiked, many traders and analysts have started to wonder whether SHIB could once again follow DOGE’s lead.
A key indicator supporting this idea is the uptick in whale activity in the days following the election results. Approximately 800 million DOGE tokens were withdrawn from exchanges, suggesting that high-net-worth individuals are positioning themselves for a potential bull run. This trend confirms the belief that DOGE could lead the next phase of the market rally, especially with the increased volatility in the crypto market.
As the second-largest memecoin by market capitalization, Shiba Inu stands to benefit from Dogecoin’s momentum. The growing traction of DOGE, alongside SHIB’s burn strategy, could give the token the push it needs to break out of its current consolidation range. With SHIB’s burn rate spiking alongside DOGE’s strong performance, the correlation between the two memecoins could set SHIB up for a potential test of the $0.000020 range.
If SHIB successfully surpasses this key level, it could break free from its 8-month consolidation phase and begin to target the $0.000030 mark once again. However, whether or not SHIB can maintain this momentum will likely depend on DOGE’s continued performance in the market. Therefore, keeping an eye on DOGE’s price action and whale movements will be essential for predicting SHIB’s next move.
Shiba Inu’s burn rate surge on U.S. election day was certainly a noteworthy event in the crypto space, but it is unclear whether it will lead to sustained price growth for SHIB. The timing of the burn, combined with the broader memecoin market dynamics and DOGE’s rise, suggests that SHIB could follow DOGE’s lead in the coming weeks. However, the token will likely need more than just routine burns to trigger a breakout.
For now, SHIB traders and investors should keep a close eye on DOGE’s movements, as its price action could serve as a key catalyst for Shiba Inu’s next phase. If DOGE continues its rally, SHIB could very well see a test of the $0.000020 range—and potentially beyond.
As always in the world of memecoins, volatility remains high, and predicting future movements is a challenge. For those watching SHIB, it will be important to track both the burn activity and DOGE’s performance in the market over the next few weeks.
November 2024, Cryptoniteuae