The Shiba Inu is very volatile as the burn rate and Shibarium transaction fees continue to decline.

Shiba Inu (Gray) to $0.000022, down 33% from this month's high.

At last check on Saturday, Ethereum was up at least 3.5%. see below.

Why did the Shiba Inu decline?

This decline is mainly due to ongoing weakness and declining trading volumes in the cryptocurrency industry.

The Shiba Inu's fundamentals have also deteriorated in the past few days. First, the Shibarium network is not growing as it was months ago.

According to Shibarium Scan, the number of new accounts on Friday was just 44 — far fewer than the 3,400 on December 4. The cumulative number of accounts has risen to 222,000, while the number of active accounts has fallen to less than 3,000.

📊 In the final days of 2024, trading volume is way down across crypto sectors. Overall, there has been -64% less trading in the past week compared to the previous week (which included Bitcoin's all-time high).

The trading downtrend of trading, particularly among speculative… pic.twitter.com/ZTGbED2rak

— Santiment (@santimentfeed) December 27, 2024

Shibarium's average transaction fees have continued to decline after peaking at 0.0004 earlier this month. Its total locked value also fell to $3.55 million from more than $6 million on December 7.

These numbers are important to the Shiba Inu because the Shibarium is their second layer network, and its success is important. also, Shibarium feesWhich is in the form of a bone, and is usually converted into a SHIB and then burned. Burning is a process in which cryptocurrencies are transferred to an inaccessible wallet.

These numbers likely explain why the Shiba Inu's burn rate dropped more than 98% in the last 24 hours to 507,123 SHIB. This burn brought the circulating supply of Shiba Inu to 584 trillion tokens, far below the total supply of over 999 trillion.

Shiba Inu may lose key support

The daily chart shows that SHIB's price has fallen sharply after peaking at $0.000033 in December. It fell and moved slightly below the 50-day moving average.

There are signs that the currency is forming a bearish pennant chart pattern, which consists of a vertical line and a triangle. This pattern often leads to more downside.

On the positive side, the Shiba Inu remains above the uptrend line connecting the lowest volatility since August. It has failed to move below that level at least six times since then, providing hopes for a rebound.

A drop below this support would be a sign that the bears have taken control, which will lead to further downside, perhaps reaching $0.00001590, the October 25 low.