Shiba Inu (SHIB) Falls Despite Burning 83.83 Million Tokens... Retail Investor Demand Cools

▲ Shiba Inu (SHIB)/Source: @Shibtoken Twitter ©

Shiba Inu (SHIB) failed to escape its weakness despite a massive token burn of 83.83 million. Although the supply pressure was alleviated, the sharp decline in open interest and trading volume had a greater impact due to slowing demand from retail investors.

According to FXStreet, an investment media outlet, on August 3 (local time), Shiba Inu fell by about 2% on Monday after two consecutive days of recovery, extending its decline from last week, which reached 7%. While short-term momentum remains on a recovery path, analysis suggests that further downside is possible due to the weakening derivatives market.

According to Shibburn data, 83.83 million SHIB were burned in a single day on Sunday. A decrease in circulating supply generally acts to reduce selling pressure, but this time it failed to offset the weakened buying sentiment of retail investors.

According to CoinGlass data, SHIB futures open interest decreased by 13% in the last 24 hours to $42.8 million. During the same period, trading volume plummeted by 56% to only $71.27 million, and the funding rate also dropped from 0.0092% the previous day to 0%. This indicates a simultaneous weakening of new position inflows and bullish expectations from retail investors.

Technically, SHIB's upward movement was halted near the psychological resistance level of $0.00000500. However, the short-term recovery trend remains alive as it stays above $0.00000462, which is the 78.6% Fibonacci retracement level based on the decline from the high of $0.00000670 to the low of $0.00000405. The immediate resistance is at the 50% retracement level of $0.00000538; a decisive close above this price could lead to an attempt for a bullish reversal up to the 23.6% retracement level of $0.00000607.

The Relative Strength Index (RSI) stood at 57, remaining above the neutral line, indicating a neutral to bullish trend. The Moving Average Convergence Divergence (MACD) also remains above its signal line, but with a shrinking positive histogram, momentum is neutral. Conversely, if SHIB falls below $0.00000462, it could decline to its previous low of $0.00000405.

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