Shiba Inu has continued to see mixed price actions, yet its on-chain metrics over the past day suggest that the asset may be preparing for a major recovery.
While Shiba Inu has finally moved to the bullish side after multiple days of trading in deep red territory, the market has seen its burn rate follow with a massive surge of five figures, according to data from Shibburn.
Shiba Inu rockets 6%
Following this bullish momentum, Shiba Inu has flipped positive, surging by 6.35% over the last 24 hours, according to data from CoinMarketCap.
With Shiba Inu now trading around $0.000005639, the surge in the SHIB price appears to have been driven by rising demand spurred by the sudden switch in investor sentiment seen across the broad crypto market.
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The unexpected increase in the demand for Shiba Inu is evident in the asset’s exchange flow, which shows that reserves from all supported exchanges — including Binance — have decreased substantially over the last day.
With about 80.4 trillion SHIB currently sitting on all exchanges as of March 4, traders have moved out more tokens from exchanges over the last day, signaling an increase in buying activities.
SHIB supply shrinks as burn rate surges 53,954%
It is apparent that the Shiba Inu may be headed for a major supply crunch as its exchange flow and deflationary metric signals shrinking supply amid the sudden price surge.
Over the past day, Shiba Inu has recorded a massive increase of 53,954% in its burn rate, causing a drop in its total supply by 841,084 SHIB.
Although the amount of SHIB burned during the period is decently below average, the rapid surge in the burn rate suggests that the deflationary activity had become extremely weak in previous sessions.
With exchanges seeing a notable reduction in their reserves, coupled with a notable surge in SHIB’s burn activity, Shiba Inu might be headed for a major supply crunch, which could fuel a substantial recovery for its trading price.