Key Shiba Inu Metric Plunges to a 5-Year Low: SHIB Price Rally on the Way?

The meme coin sector, which was among crypto’s sensations during the last bull run, no longer shows the same strength or investor enthusiasm.

Shiba Inu (SHIB) – one of the most recognizable tokens of that type – has crashed by roughly 65% over the past year, but one important factor signals that a recovery could be incoming.

Finally, a Bullish Sign

The self-proclaimed Dogecoin killer currently trades at roughly $0.000005031, while its market capitalization remains below $3 billion. This means that SHIB is the 35th-largest cryptocurrency and third-biggest in the meme coin niche, trailing behind Dogecoin (DOGE) and MemeCore (M).

Its condition seems unsatisfactory (to say the least); Shiba Inu’s team has been rather inactive in expanding the ecosystem, yet the ongoing sell-off may be nearing exhaustion.

CryptoQuant’s data shows that the amount ot tokens stored on crypto exchanges has fallen to a five-year low of around 79.8 trillion. This trend points to investors moving away from centralized platforms in favor of self-custody methods, which, in turn, reduces immediate selling pressure.

Some analysts believe a price revival might indeed be in the cards. X user Nehal thinks that SHIB looks “dangerously ignored” at ongoing levels, adding that a 40-50% jump would not come as a surprise.

So Many Bearish Elements

The shrinking SHIB supply on exchanges is among the few positive signals for the meme coin, while many others suggest the price could collapse further in the near future.

The burn rate, for instance, has fallen by 62% over the past 24 hours, resulting in a negligible amount of tokens removed from circulation. The program’s ultimate goal is to increase SHIB’s value through scarcity, and over the past few years, the team and community have burned trillions of coins. Nonetheless, there are still around 590 trillion SHIB in circulation, which remains quite substantial.

Another issue is Shibarium’s slowdown. The layer-2 scaling solution, launched in the summer of 2023 to boost speed, enhance scalability, and lower fees, initially handled millions of transactions. However, an exploit last year disrupted operations, and since then the figure has dropped significantly to mere hundreds and thousands.

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