Shiba Inu Faces Massive Liquidations as Recovery Rally Falters
Market Volatility Wipes Out Over 6.2 Billion SHIB in Long Positions Amid Rollercoaster Price Action
In the ever-volatile world of cryptocurrency trading, Shiba Inu (SHIB) investors experienced another turbulent period as the popular meme coin’s brief recovery rally lost momentum, triggering significant liquidations across trading platforms. After showing promising signs of a rebound following four consecutive days of decline, SHIB’s upward trajectory proved short-lived, leaving many traders facing substantial losses as more than 6.2 billion tokens tied to long positions were liquidated.
The cryptocurrency market’s notorious unpredictability was on full display this week as Shiba Inu, one of the most widely recognized meme coins in the digital asset space, attempted to reverse its recent downward trend. Following a challenging period between November 19 and 22, when SHIB experienced consistent losses, traders welcomed a modest 4% price recovery that pushed the token to $0.0000080 early yesterday. This positive momentum initially carried forward, with SHIB briefly touching $0.000008133 today before broader market bearishness reasserted itself, sending prices tumbling back below the critical $0.000008 threshold that many analysts consider an important psychological barrier for the token.
Bullish Bets Backfire as SHIB’s Momentum Fades
The sudden reversal in SHIB’s price trajectory delivered a devastating blow to optimistic traders who had positioned themselves for continued upward movement. According to comprehensive data from cryptocurrency analytics platform CoinGlass, approximately $41,000 worth of SHIB long positions were liquidated in just the past 12 hours, with total liquidations reaching approximately $58,000 over the 24-hour period. The overwhelming majority of these forced closures—approximately $49,560 or 85.44% of the total—came from long positions, indicating a significant imbalance in market sentiment that favored bullish expectations. Short positions, by contrast, accounted for just $8,440 in liquidations during the same timeframe.
When translated to the actual number of tokens at SHIB’s current price of $0.000007990, these liquidations represent an astounding 6.2 billion SHIB tokens from long positions being forcibly sold on the market. This massive influx of selling pressure from liquidated positions likely contributed to the downward price action, creating a negative feedback loop that further pressured the token’s value. Meanwhile, liquidated short positions amounted to approximately 1.05 billion SHIB tokens—a substantial figure in absolute terms but significantly smaller than the long-side wipeout, highlighting the lopsided nature of the current market positioning.
Further Liquidation Risk Looms as Market Uncertainty Persists
Despite today’s pullback, Shiba Inu has managed to maintain a modest 24-hour gain of 0.97%, providing a small consolation to holders who weathered the recent volatility. At its current price of $0.000007990, SHIB still trades approximately 5.39% above last week’s low of $0.000007581—a level that could represent significant support in technical analysis terms. However, market participants should remain vigilant, as the potential for additional liquidations remains substantial depending on price movement in either direction.
Exchange heatmap data reveals that if SHIB were to retest its recent low around $0.000007580, approximately $754,630 worth of long positions would be liquidated, representing an estimated 99.55 billion SHIB tokens at that price level. The sheer magnitude of this potential liquidation event could trigger cascading selling pressure, potentially driving prices even lower in a scenario familiar to experienced cryptocurrency traders. Conversely, a potential upside move to $0.00000840 could trigger approximately $661,630 in short liquidations, equivalent to roughly 78.76 billion SHIB tokens—creating the opposite effect and potentially accelerating upward price movement through a short squeeze phenomenon.
Token Burn Rate Skyrockets Amid Market Turbulence
Against the backdrop of price volatility and liquidation risks, Shiba Inu’s burn rate has witnessed a remarkable surge in the past 24 hours, increasing by an eye-catching 859.60%. This dramatic spike in burn activity—the permanent removal of tokens from circulation—represents a potentially positive fundamental development for SHIB’s tokenomics. However, despite the impressive percentage increase, the absolute number of tokens burned remained relatively modest at just 12.91 million SHIB, a minuscule fraction of the token’s massive supply.
The largest contribution to this burn activity came from cryptocurrency exchange CEX.io, where a user transferred 9.5 million SHIB to the official burn address, effectively removing these tokens from circulation permanently. Additional notable burns included transactions of 1.78 million, 1.52 million, and 1.27 million SHIB, collectively contributing to the day’s significant percentage increase in burn rate. These burning mechanisms are integral to Shiba Inu’s long-term tokenomic strategy, designed to gradually reduce the circulating supply and potentially increase scarcity over time—a factor many SHIB supporters believe could contribute to price appreciation if sustained at higher volumes.
Long-Term Supply Dynamics: Tracking Progress Toward Scarcity
The recent burn activity, while notable in percentage terms, represents just another incremental step in Shiba Inu’s ongoing journey toward reducing its massive token supply. To date, approximately 410.753 trillion SHIB have been permanently removed from circulation through various burning mechanisms, leaving a still-substantial circulating supply of around 589.24 trillion tokens. This massive remaining supply continues to present challenges for significant price appreciation, as basic economic principles suggest that such abundance may limit upward price potential without dramatic increases in demand.
The token’s burning mechanism remains a central focus for the SHIB community, with many long-term holders and ecosystem participants actively contributing to burn efforts through various initiatives. While the current burn rate would need to accelerate substantially to make a meaningful impact on supply in the near term, the consistent removal of tokens represents a fundamental aspect of Shiba Inu’s tokenomic model that distinguishes it from many other meme coins. As the cryptocurrency market continues to evolve, with institutional interest growing and regulatory frameworks developing, SHIB’s community-driven approach to supply management through burns offers an interesting case study in decentralized tokenomic governance—even as short-term price action remains predominantly driven by market sentiment, technical factors, and liquidation dynamics.
As Shiba Inu navigates these complex market conditions, traders and investors will undoubtedly continue monitoring key support and resistance levels, burn statistics, and broader cryptocurrency market trends for signals about SHIB’s future price direction amid this period of heightened volatility and significant liquidation events.
