Shiba Inu Coin's value drops, despite a surge in burn rate, explained here

In the past few weeks, the price of Shiba Inu (SHIB) has seen a pullback, trading at $0.00001210 as of today. This dip comes at a crucial support level, increasing the risk of a strong bearish breakout.

Despite an 816% increase in the burn rate of SHIB tokens, the cryptocurrency has still experienced a double-digit price drop. The increased burn rate, which saw 5.3 million tokens being burned, equates to just $63 in SHIB terms.

The crypto market has been experiencing a downturn, with traders being cautious due to a lack of bullish momentum amid uncertainty from upcoming US inflation data and the Federal Reserve's interest rate decision. Additionally, massive sell-offs by large holders ("whales") unloading Bitcoin worth billions, profit-taking, panic selling, and a shift in broader market sentiment linked to declines in tech stocks have contributed to the downturn.

SHIB remains below the descending trendline that connects the swing highs in May, indicating a bearish trend. The potential target for the bearish breakout is $0.000010, down by 15% from the current level.

It's worth noting that SHIB is currently below the 50-day and 100-day Exponential Moving Averages, further supporting the bearish outlook. The cryptocurrency has dropped by 25% from its July high.

Interestingly, SHIB has failed to break below $0.00001210 several times since August, suggesting a potential floor for the price. However, the inability to break above this level indicates a lack of bullish momentum.

On Thursday, Shiba Inu experienced a 3% price drop, reaching $0.00001212. The crypto market, including Bitcoin and most altcoins, were in the red on Thursday, mirroring the overall bearish sentiment.

Despite the burn of over 410 trillion SHIB tokens since its inception, Shibarium, SHIB's layer-2 network, is not generating significant revenue. Network fees in the last 24 hours were only 40 BONE ($6), indicating limited usage or adoption of the network.

In conclusion, Shiba Inu is currently facing a bearish trend, with the potential for a strong breakout towards $0.000010. Traders should exercise caution and closely monitor the market for any signs of reversal.