It's been another down day in the cryptocurrency market, with the entire universe of digital assets sinking around 0.8% over the past 24 hours. However, as of 4:45 p.m. ET, Shiba Inu (SHIB +2.98%) is one of today's biggest decliners, sinking 5.7% since the same time yesterday.
CRYPTO: SHIB
Key Data Points
This move comes amid strong headwinds for speculative assets as a whole, and Shiba Inu could be considered among the most speculative assets in an already risky sector. Thus, these types of intraday moves aren't uncommon, and investors in meme tokens such as this should be prepared for such volatility.
Of course, it's nice when risk-on sentiment drives highly volatile moves to the upside. However, lately, the mood has shifted, and bears appear to be in near complete control of the narrative in this sector.
As it happens, there are also some token-specific factors contributing to Shiba Inu's lower price today. Let's take a closer look at what investors in this community are watching closely.
Token supply continues to provide headaches for investors
Source: Getty Images.
With a circulating supply of 589.4 trillion tokens, Shiba Inu's immense token issuances in the past have led to downward inflationary pressures on its price. As more tokens have been issued, the network's overall market capitalization has been essentially divided into smaller slices, leaving existing investors with a smaller stake in this vibrant community.
Now, the Shiba Inu team has proposed several mechanisms to reduce the existing token count in the market, with token burns being the key mechanism that investors view as a potential catalyst for token price appreciation. The thing is, several notable experts have pointed out that (as of this morning), Shiba Inu's token burn count over the past day was precisely zero.
With more than 400 trillion tokens burned and permanently removed from circulation thus far, hopes that the burn ramp would continue appear to be dashed, at least in the near term. In combination with increasing liquidation activity and ongoing bearish market sentiment, Shiba Inu's near-term outlook appears to have deteriorated.
