1 Billion SHIB Burned as ShibTorch V2 Launches, Enhancing Shiba Inu's Deflationary Strategy

This significant spike in burn activity coincides with the launch of ShibTorch V2, an upgraded burn mechanism aimed at reducing the token's circulating supply.

Shiba Inu (SHIB) has seen a massive 1.004 billion tokens burned from circulation, marking a significant increase in the burn rate. This latest burn event coincides with the launch of ShibTorch V2, an upgraded burn mechanism designed to reduce the token’s circulating supply and drive up its value.

According to data from Shibburn, this marks one of the most substantial daily burn events in recent history. Previous burns, while regular, were not large enough to significantly impact price. As a result of the latest burns, the total number of SHIB tokens permanently removed from circulation now stands at 410 trillion.

This aggressive reduction strategy aims to address the coin’s oversupply, which has long been a concern for investors looking for sustainable price appreciation. The announcement of ShibTorch V2 also sparked a fiery frenzy in the Shiba Inu ecosystem.

Shiba Inu Adopts Deflationary Model, Community Participation in Burns

The Shiba Inu ecosystem has adopted a deflationary model, where periodic token burns are expected to create scarcity and drive up the token’s value over time. However, despite the latest burn event, SHIB’s price has remained relatively stagnant.

As of the latest market data, SHIB is trading at $0.00001874, reflecting only a minor 0.22% increase in the past day. The token is still down approximately 78.84% from its all-time high of $0.00008845.

The burn has been driven very much by the community, where holders are actively contributing to taking off some of the supply. The development team behind Shiba Inu added various means through which the burning is made easy.

This includes sending transactional fees collected and later converted into SHIB to dead wallets. The Layer 2 blockchain for the project, Shibarium, also supports burning, where part of the transaction fees on it are utilized to reduce the tokens in circulation.

Market Impact: Price Stability Amidst Increased Burn Activity

While the increase in burn rate suggests a positive long-term outlook, the immediate impact on SHIB’s price remains minimal. Market analysts believe that while burns help in reducing supply, a stronger catalyst—such as increased adoption, major exchange listings, or a surge in trading volume—is necessary to push the price significantly higher.

Shiba Inu (SHIB) price could attempt to retest the resistance at $0.000032. Source: MetaShackle on TradingView

Technical indicators present a mixed picture for SHIB. The MACD histogram remains in bearish territory, suggesting that selling pressure is still dominant. However, the RSI indicator at 38.16 hints that the token is approaching oversold conditions, which could attract bullish momentum in the near future. If buying activity picks up, SHIB may attempt to retest the $0.000032 resistance level.

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Challenges, Future Outlook for SHIB Price Movements

Shiba Inu (SHIB) price chart. Source: Brave New Coin

Despite the progress in token burns, challenges remain for SHIB’s long-term price appreciation. One of the key issues is the sheer size of its total supply, which still sits in the hundreds of trillions. Even with consistent burn efforts, it will take significant time to create a substantial reduction that could have a meaningful impact on market dynamics.

Also, greater cryptocurrency market conditions remain a critical aspect in the journey of SHIB. The general investor mood, macroeconomic conditions, and events within the DeFi ecosystem continue to push the price action for the token. While SHIB is among the most popular meme coins today, it needs continuous burns and more utility to keep up in performance.

Over the coming months, the Shiba Inu community will be watching to see whether this acceleration in burn can finally begin to reflect in some meaningful price action If adoption continues to grow alongside supply reduction, SHIB could position itself for a more favorable market outlook. However, without strong demand-side developments, the impact of token burns alone may remain limited in influencing the token’s valuation.