Shiba Inu (SHIB) fell by about 5% on Wednesday. Despite a significant increase in token destruction, this was not enough to offset the weakness in the broader crypto market and the pressure brought by leveraged traders.

This decline occurred after SHIB once again failed to break through the resistance level of $0.000006. This price level has limited the rebound space on several occasions recently. A previous SHIB price forecast also mentioned that if the buying momentum fades, the range between $0.0000055 and $0.0000056 will be the next important support level.

Today, this downward scenario is playing out.

Large-scale destruction failed to support SHIB.

In the past few days, the destruction rate of Shiba Inu has soared significantly, partly due to a transaction that removed nearly 298 million SHIB.

However, price reactions remain weak.

This continues the pattern that appeared earlier this month. Previously, the destruction rate of SHIB soared above 17,000%, but the token still failed to break through above $0.000006.

The reason lies in scale.

Currently, there are still approximately 589 trillion SHIB in circulation. Therefore, even if hundreds of millions of tokens are destroyed, it only accounts for a very small portion of the total supply. Destruction helps to reinforce the narrative of long-term scarcity, but the short-term price trend is still more influenced by demand, liquidity, and the overall sentiment of the broader crypto market.

This contrast is particularly evident, as SHIB continued to rebound even when the volume of destruction recently dropped significantly. A previous analysis of the destruction rate showed that despite a daily destruction volume decrease of over 91%, the token still remained near its short-term support level.

Crowded bullish sentiment exacerbates selling pressure

Derivative positions seem to have amplified the decline on Wednesday.

In the past 24 hours, approximately $285,000 worth of SHIB positions were liquidated, of which about $271,000 came from long positions, while short positions amounted to only about $14,000.

This means that approximately 95% of the settlements come from traders who bet on price increases.

This imbalance is important because a crowded bullish market may accelerate the decline. When SHIB breaks below the support level, long positions that use leverage will be automatically closed out, thereby creating additional sell orders and further pressing down on prices.