The memecoin Shiba Inu (SHIB), recognized for its famous dog mascot, has captivated the cryptocurrency market's attention with its recent surge in the token burn rate. Shibburn, a platform monitoring SHIB token burns, reported an astounding 16,600% increase in the burn rate, sparking speculation about a potential price rebound despite SHIB's current price decline.

Token Burn Rate Surge in Altcoin Community

The Shiba Inu community initiated a substantial $21.5 million token burn, diminishing the circulating supply of SHIB tokens. This massive burn generated enthusiasm among traders and investors, anticipating a rise in token value. Notably, in the past 24 hours, Shibburn observed a remarkable 16,593% surge in the token burn rate, with the community collectively burning 21.5 million SHIB tokens through multiple transactions.

A major contribution to the token burn rate came from a wallet address initiating the burn of 21.31 million SHIB tokens in a single transaction to a dead wallet. With other community members' contributions, the total burned SHIB tokens soared to 410.72 trillion, a significant development with potential implications for the altcoin's price if demand remains constant or grows.

From an economic standpoint, a decrease in supply alongside steady or rising demand typically drives price increases, a trend applicable to altcoins such as SHIB. The escalating token burn rate has instilled optimism in the Shiba Inu community.

Price Downtrend Amid Token Burn Surge

Despite the pronounced token burn activity, SHIB's price descended below the crucial support level of $0.000024, moving away from the key resistance level at $0.000025. Presently, SHIB's price has decreased by 3.30% in the last 24 hours to $0.00002392, with a market cap of $14.09 billion. Notably, SHIB's trading volume surged by 42.35% in the last day, reaching $659.67 million.

While the rising token burn rate has injected optimism, a substantial price recovery for SHIB hinges on surpassing the $0.000025 milestone. Breaking this level could pave the way for reaching $0.000030 or even $0.000050. Additionally, sustained bullish momentum may enable Shiba Inu to achieve the awaited $0.0001 target.

However, derivative data presents a contrasting outlook. Coinglass data shows a 13.95% decline in open interest in Shiba Inu futures to $89.77 million, indicating waning derivative traders' interest in the altcoin. Although long liquidations rose by about $1 million, the absence of notable short liquidations suggests further declines due to ongoing sell-offs.