Several factors could be contributing to Ethereum's lackluster price performance despite the increasing burn rate. Market sentiment, macroeconomic conditions and the performance of other cryptocurrencies can all influence Ethereum's price. The broader cryptocurrency market has experienced volatility in recent months, with Bitcoin also facing price declines. This market-wide downturn could be overshadowing the positive effects of Ethereum's burn mechanism.
An increase in network activity, particularly among whales, often suggests that there is renewed interest and confidence in a particular asset. This can be a positive sign for the future price of the asset, as increased demand from large-scale investors can drive up the price. appears to be on the verge of a price recovery after experiencing a significant downturn.
In the short term, Shiba Inu has managed to reverse some of its losses, gaining a modest 4% in value. This price increase, although relatively small, is a positive sign for SHIB holders who have been eagerly waiting for the token to regain momentum. However, it is crucial to note that for the recovery to be sustainable, a significant increase in trading volume is required.
The current trading volume of Shiba Inu remains relatively low, which may be a limiting factor for any potential price rally. A volume spike would signal increased interest and confidence in the token, which could help drive the price higher. A higher trading volume often correlates with more significant price movements, as it indicates that a larger number of investors are buying and selling the asset.
Despite the modest price recovery, it is essential to remain cautious when considering Shiba Inu as an investment. While the support level appears to be holding, it is not guaranteed to continue doing so in the future. Additionally, meme cryptocurrencies like SHIB are often subject to high volatility and sudden price fluctuations, making them risky investments for those who are not familiar with the cryptocurrency market.