Shiba Inu Coin Price Crash After 14M $SHIB Burn—Will ETH Help?

Shiba Inu Coin Drops Despite 14 Million Token Burn — Is Ethereum the Key to a SHIB Recovery?

In the past 24 hours, the Shiba Inu (SHIB) community witnessed yet another aggressive token burn, removing more than 14 million SHIB tokens from circulation. While token burns are traditionally perceived as bullish catalysts—reducing supply and theoretically driving up prices—the market response has been far from positive.

Despite this burn effort, SHIB's price dropped sharply by 2.92% to $0.00001442, based on CoinMarketCap's latest data. Trading volume also fell to $220 million, indicating a possible decline in retail investor enthusiasm. The drop in both price and volume raises questions about the actual effectiveness of token burning as a price-enhancing strategy in the current market environment.

Source: CoinMarketCap

Token Burns Are Losing Their Spark

The Shiba Inu community has long championed the idea of burning tokens as a way to elevate the coin's market value. In theory, burning tokens reduces the total supply, creating scarcity and driving prices higher. Yet, the problem for SHIB lies in the sheer scale of its existing supply.

To date, over 410.7 trillion SHIB tokens have been burned—an impressive figure on the surface. However, with a circulating supply still hovering around 999 trillion, these daily burns appear almost negligible. Even burning tens of millions of tokens daily barely moves the needle, and the market seems to have realized this.

In fact, the latest data indicates that SHIB’s burn rate has declined by nearly 39% compared to previous periods. This slowdown hints at a broader issue: the token burn mechanism, once a pillar of SHIB's growth strategy, may no longer hold the same influence over price action that it once did.

Understanding the Price Drop

The immediate decline in SHIB’s value following the burn has led to renewed debate across trading forums and social media. Many are asking a fundamental question: Why is SHIB falling despite ongoing efforts to reduce its supply?

Analysts suggest that the token's drop is more closely tied to larger market movements than to its internal burn mechanisms. In other words, SHIB is behaving less like a standalone asset and more like a satellite of broader cryptocurrency market trends.

This is particularly true given SHIB’s deep integration with Ethereum. Since it operates on the Ethereum blockchain, Shiba Inu’s performance often mirrors that of ETH. This makes SHIB highly susceptible to shifts in sentiment around Ethereum—and by extension, the entire altcoin market.

Ethereum’s Role in SHIB’s Future

With Ethereum showing signs of strength, some analysts believe that SHIB could benefit by association. Crypto strategist Crispus Nyaga, known for his technical analysis across social platforms, points out that SHIB is currently trading above its 50-day moving average and has recently formed a “Golden Cross” — a bullish technical signal where a short-term moving average crosses above a long-term one.

Nyaga argues that if Ethereum breaks through the $4,000 mark, it could trigger a ripple effect that pulls SHIB upwards. In such a scenario, SHIB could potentially rise to resistance levels around $0.00001945 or even $0.0000221. These figures represent the next key technical barriers and would signal a substantial recovery from current levels.

However, Nyaga also warns that without a strong move from Ethereum, SHIB may remain stagnant or even decline further. A fall below $0.000012 could open the door to deeper corrections, possibly testing the yearly low of $0.00001080.

The Limits of Burn Strategy

What the latest downturn illustrates is the diminishing marginal impact of token burns on SHIB’s market price. In the early days, such burns were effective at generating hype and creating a sense of scarcity. But as SHIB’s supply remains in the hundreds of trillions, these daily reductions no longer hold sway.

For token burning to materially impact SHIB’s price, the scale would need to increase dramatically—into the hundreds of billions, if not trillions. But such large-scale burns would require significant community coordination, or potentially the involvement of major holders and developers. Until then, small-scale burns may have more psychological than economic value.

Additionally, it’s worth noting that burn activity often fails to account for demand-side factors. For price to rise meaningfully, reducing supply must be accompanied by increasing demand. Unfortunately for SHIB, demand appears to be cooling off, as evidenced by the drop in daily trading volume and waning retail participation.

Community Sentiment Remains Mixed

Despite the recent price dip, the SHIB community remains vocal and optimistic about the long-term prospects of the token. Enthusiasts continue to promote new burn campaigns, DeFi integrations, and community-driven projects designed to improve SHIB’s utility.

At the same time, many investors are growing more cautious. Social media platforms and crypto forums are filled with questions about whether SHIB has already peaked, and what catalysts—if any—might drive a new wave of adoption.

There is also growing recognition that meme coins, by nature, tend to be highly volatile and sentiment-driven. In the absence of strong fundamentals or utility, SHIB’s price remains vulnerable to swings in market mood, media coverage, and influencer commentary.

What Could Trigger a SHIB Rally?

Beyond Ethereum’s potential rise, there are several developments that could reinvigorate SHIB’s upward momentum. These include:

• Increased Utility: Real-world use cases such as SHIB payments on merchant platforms or deeper integration with DeFi protocols.

• Shibarium Adoption: A wider rollout and adoption of the Shibarium Layer-2 network could reduce gas fees and improve transaction speeds, making SHIB more attractive to developers and users.

• Exchange Listings: Additional listings on global exchanges or institutional partnerships could help legitimize the token and expand its reach.

• Whale Activity: Renewed interest from large-scale investors might also provide a short-term boost, although this often adds to price volatility.

Conclusion: Token Burns Are Not Enough—Ethereum Could Be the Catalyst

The recent 14 million SHIB token burn failed to halt the coin’s decline, underscoring the limited effect of small-scale burns on a token with a massive circulating supply. While community efforts to support the token are admirable, market dynamics suggest that price action is currently more influenced by macro trends, particularly Ethereum’s performance.

Unless Ethereum mounts a strong rally or SHIB undergoes a significant change in demand, short-term price movements may remain bearish or flat. For investors, this serves as a reminder to evaluate tokens not just by their internal mechanics, but also by their place in the broader crypto ecosystem.

As always, those investing in meme coins should proceed with caution. These assets can deliver explosive gains—but also painful losses—within very short timeframes.

Writer @Erlin

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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