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SHIB Shiba Inu Coin (SHIB) closed up strongly in July and August, but the market may not be able to continue its gains in September.
Shiba Inu Coin (SHIB) experienced strong gains in the past July and August, but September may not show the same situation. Falling token destruction, weakening Shibarium Internet activity and a historically poor September performance have all increased downside risks to SHIB prices.
Why did the destruction rate of Shiba Inu coins decline?
For SHIB, the first risk signal comes from token destruction data. According to Shibburn, fewer than 600 million SHIBs were destroyed in August. Destruction rates also fell by 6%, on a monthly basis.
The token destruction mechanism is designed to reduce the total supply of SHIB in the market. In theory, a reduction in supply could provide long-term value support for tokens. However, continued sluggish destruction activities have limited the mechanism's impact on prices.
Therefore, for SHIB investors, the weakening of destruction data is one of the early signs to watch.
Why are Shibarium trading volumes sluggish?
The second risk appears on Shiba Inu's Layer 2 network Shibarium. The network has struggled to restore its previous level of activity after encountering a security breach last year. Recently, the daily transaction volume has only remained at a few hundred, and at most thousands.
As an important architecture for the development of the Shiba Inu ecosystem, the downturn in network activity shows that growth in practical applications has not yet strengthened. This situation is also crucial to the SHIB price, because the long-term narrative of the token requires not only market attention, but also real application support within the ecosystem.
Why may SHIB fall in September?
The third risk comes from SHIB's historical September performance. In September of the past five years, Shiba Inu coins have ended with monthly declines in three years. Therefore, judging from historical performance, September is not a strong month for the meme coin.
2022 provides a noteworthy case. That year, SHIB rose continuously in July and August, but the rise came to an abrupt end after entering September. Although it is impossible to say that the same mistakes will be made this year, and historical performance cannot guarantee future trends, September's performance after rising in July and August does constitute an important comparative reference.
Why did the number of SHIBs on exchanges decrease?
However, the situation facing SHIB is not entirely pessimistic. CryptoQuant data shows that the number of SHIBs held on centralized exchanges has decreased in the past month. This trend suggests that investors are moving tokens from exchanges to personal wallets.
Reduced exchange supply may limit short-term selling pressure. Investors withdrew tokens from centralized platforms, reducing the number of SHIBs available for immediate sale on the market. Therefore, the decline in exchange reserves has become an important data point that can compete with the above three negative signals.
However, this trend by itself does not guarantee a price increase. The core question is whether falling exchange supply can offset the impact of low destruction rates, weak Shibarium activity and an unfavorable historical performance in September. Shiba Inu's September performance will depend on how the balance of power between these four signals evolves.
The content of this article is based on general market data and does not constitute investment advice. It is recommended that you conduct your own research.
