Whales Dump 13T SHIB, Will Token Burn Catalyze Shiba Inu Price Comeback?

Shiba Inu price has tanked by 41.75% this year, mirroring the performance of other traditional meme coins like Dogecoin and Pepe. This crash has coincided with sustained selling by whales, who have dumped over 13 trillion tokens since January.

On the positive side, the SHIB token burn is rising, while the chart has formed a bullish harmonic pattern, which may lead to a strong surge in the long term.

Shiba Inu Price Crash Happened as Whales Sold 13 Trillion Tokens

Shiba Inu price has sold off this year as whales continued to sell their coins. A likely reason for their sale is profit-taking, as it jumped by 210% between the lowest level in July last year and its peak in November. Santiment data shows that the supply of SHIB coins held by whales dropped from 743 trillion on January 5 to 730 trillion today.

Whales are often seen as being more experienced and sophisticated investors than their retail counterparts. In most cases, these investors buy when an asset’s price is bottoming and exit when it is at an elevated level. As such, the ongoing dumping by whales is a sign that the SHIB price will continue falling in the near term.

Will SHIB Token Burn Boost its Price?

Shiba Inu price has three key potential catalysts: the burn rate is growing, Shibarium transactions are soaring, and its harmonic pattern on the weekly chart. ShibBurn data shows that the daily Shiba Inu burn rate soared by 3,145% on Monday as 18.83 million tokens were moved into an inaccessible address. This burn means that over 410 trillion tokens have been removed from circulation since its inception.

Rising SHIB burn rate is a positive thing for a cryptocurrency because it reduces the number of tokens in circulation, making it deflationary. It differs from a token unlock, which increases supply.
SHIB price may also benefit from the growing Shibarium network, which has completed 1.129 billion transactions. The number of addresses in the chain has grown to 206 million, making it one of the most active layer-2 networks in the industry. A highly active Shibarium benefits SHIB since fees in the network are converted into SHIB and burned.

SHIB Price Harmonic Pattern Points to a Rebound

The short-term SHIB price forecast will be volatile as the whale dumping continues. However, there are chances that the coin will bounce back in the long term since it has formed a rare harmonic pattern on the weekly chart.

The XA move occurred between March and August last year, while AB happened in December. It has now dropped to the C point at $0.000010. If this pattern works well, it means that the CD section will push it to the 2024 high of $0.00004552.

Notably, Shiba Inu price formed a double-bottom pattern at $0.00001090 level, providing further catalyst. A double-bottom comprises two support levels, and a neckline, which is at $0.00003310 in this case.

A crash below the support point at $0.00001090 will invalidate the XABCD and the double-bottom patterns, pointing to more downside. Such a drop will put the Shiba Inu price at risk of dropping to $0.0000050.