This Shiba Inu metric drops to a four-year low: SHIB comeback coming?

Find out why SHIB may be gearing up for a possible revival.

However, one key factor suggests that a long-awaited revival could be knocking on the door.

Time to rally again?

At the time of writing, the second largest meme coin is trading at around $0.000007478, representing a near 70% year-over-year collapse. Its market capitalization has fallen below $4.5 billion, making SHIB the 35th largest cryptocurrency.

The shrinking supply of tokens stored on exchanges is raising bulls’ hopes for a near-term revival. Data from CryptoQuant shows that the number of SHIB coins on such centralized platforms fell to approximately 81.2 trillion as of December 28, the lowest level since April 2021.

This is usually interpreted as a bullish signal because it leads to reduced immediate selling pressure. On the other hand, increasing foreign exchange reserves is usually seen as a pre-sale step and a harbinger of a downturn.

Just a few days ago, X user Lyvo argued that SHIB has hit its “true bottom,” meaning the company may be positioned for a potential rally. The analyst revealed that more exposure had been added for the medium term, saying:

“People don’t believe in old coins and are selling their bags – that’s a good opportunity for smart money.”

Will the bears remain in charge?

Numerous other factors, including the combustion mechanism, suggest that the decline of SHIB may continue. Facts shows that approximately 30.7 million tokens have been scorched over the past seven days, down 14% from the previous week.

The ultimate goal of the program is to reduce the overall supply of SHIB coins, making the asset scarcer and more valuable over time. The team introduced the initiative in 2022 and since then, more than 410.7 trillion have been removed from circulation. Nevertheless, the circulating supply remains substantial at approximately 585.2 trillion tokens.

Shibarium’s stalled progress is another bearish element to take into account. The protocol’s security was breached in mid-September and the network has since been unable to regain its former glory. Recall that early this year it was processing millions of daily transactions, pushing the entire Shiba Inu ecosystem forward.