TL;DR

The L2 blockchain solution hit a fresh target, but SHIB’s price plunged by 13% on a daily scale. Falling burn rates and rising exchange netflows hint at increased selling pressure for the meme coin, raising concerns of further downside despite the recent ecosystem milestones.

SHIB Bleeds Heavily Despite the Latest Achievement

The latest data shows that the total number of blocks added to Shiba Inus layer-2 scaling solution surpassed the psychological level of 10 million. Not long ago, the total transactions processed on the protocol exceeded one billion. 

Shibarium, launched in August 2023, is specifically designed to foster the development of the meme coin by reducing transaction costs, improving speed, and enhancing scalability. As such, some analysts have previously opined that its further advancement could positively impact SHIBs valuation.

However, the latest milestone could not prevent the valuation from collapsing in the past several hours. The second-largest meme coin crashed to around $0.00001053, its lowest point in over a year. 

The steep decline echoes the widespread crash in the crypto market, which occurred as a consequence of the global trade war between the USA and pretty much the rest of the world. Bitcoin (BTC) briefly plunged below $75,000, Ethereum (ETH) nosedived under $1,500, and many other well-known altcoins tanked by double digits in the last 24 hours. 

More Pain Ahead?

It remains unclear how the trade war will play out in the near future, but the panic and uncertainty it has caused may have a further negative effect on the cryptocurrency sector.

Shiba Inus burning mechanism and the assets exchange netflow could also take their toll on the meme coin in the short term. The burn rate has dropped by almost 85% in the past week, resulting in just 180 million tokens being destroyed.

The programs ultimate goal is to reduce SHIBs circulating supply and make it more valuable via scarcity. Over the past few years, the amount of tokens sent to a null address has surpassed 410 trillion. However, those remaining in circulation are approximately 584.3 trillion, which is quite a substantial number. 

For its part, SHIBs exchange netflow has been positive on most days during the past week, suggesting a shift from self-custody toward centralized platforms. This could result in increased selling pressure.