Shiba Inu (SHIB) faces mounting pressure as key on-chain metrics signal waning investor confidence and weakening network fundamentals. Despite a recent short-term rebound, the token’s prospects appear increasingly fragile, with the daily burn rate collapsing and large holders offloading significant volumes of SHIB.
After bottoming out earlier this month, SHIB managed to stage a recovery, gaining over 47% from its monthly low and climbing to $0.000010. However, this bounce has been modest compared to the surges seen in other altcoins such as Zcash and Synthetix, which have sharply outperformed in recent sessions.
A closer look at the data reveals troubling signs for Shiba Inu. One of the most alarming developments is the near-total collapse in the token’s burn rate. Over the past 24 hours, just 69,530 SHIB tokens were burned — a staggering 99% drop. Given that this amount is valued at under $1, it underscores how minimal the deflationary pressure currently is.
Central to this decline is the slowing momentum of Shibarium, Shiba Inu’s Layer 2 blockchain. Over the past month, the total value locked (TVL) in the ecosystem has nosedived by 43%, now sitting at just $873,820. This decline accelerated in the wake of a security breach involving ShibaSwap, further eroding user trust.
Moreover, while Shibarium boasts nearly 300,000 registered accounts, the number of active users has dwindled to fewer than 500. Daily network fees have dropped below $10, a significant metric because a portion of these fees, paid in BONE tokens, is converted to SHIB and burned. A slowdown in network activity translates directly to a lower burn rate — a key mechanism meant to support SHIB’s price.
Adding to the bearish sentiment, institutional and high-net-worth investors — often referred to as “smart money” and whales — have continued reducing their exposure to SHIB. Over the past 30 days, smart money wallets have liquidated 10% of their SHIB holdings, now totaling 46.8 billion tokens. Even more striking, whale addresses have slashed their positions nearly in half, from 231 billion tokens on October 12 to just 117 billion.
From a technical analysis perspective, SHIB remains under pressure. The price is still below the critical resistance level of $0.00001163 — the lower boundary of a descending triangle pattern. It is also trading under both the 50-day and 100-day Exponential Moving Averages (EMAs), indicating that bearish momentum remains dominant.
Further reinforcing this view, the True Strength Index (TSI) — a trend-following momentum indicator — remains below the zero threshold, suggesting that upward momentum is weak or nonexistent. The broader trend strength indicator has also continued to decline, hinting that the recent rebound may be short-lived.
If current trends persist, SHIB could be poised to revisit its year-to-date low of $0.00000695 — a level that, if breached, could trigger another wave of selling pressure.
Despite the bleak outlook, there are several factors that could offer a glimmer of hope for SHIB holders:
1. Community Engagement and Ecosystem Development: Shiba Inu has one of the most active online communities in the crypto space. Should developers introduce new utility features or launch additional decentralized applications (dApps) on Shibarium, it could reinvigorate interest and drive fresh demand.
2. Token Utility Expansion: SHIB’s long-term viability depends heavily on the expansion of its utility. Integrating SHIB into more payment systems, NFT platforms, and DeFi protocols could help establish a stronger foundation.
3. Market Sentiment and Bitcoin Correlation: As with most altcoins, SHIB’s performance is closely tied to the broader crypto market. A renewed bullish trend in Bitcoin and Ethereum could lift sentiment across the board, potentially offering SHIB room to bounce.
4. Burn Mechanism Enhancements: If developers implement more aggressive or automated burning strategies — possibly tied to transaction volumes or staked assets — it could introduce meaningful supply-side pressure to support the price.
5. Regulatory Clarity: Clearer regulations around crypto assets could pave the way for institutional adoption of altcoins like SHIB. While speculative, such developments could introduce longer-term capital inflows, stabilizing price action.
6. Strategic Partnerships: Collaborations with major platforms or businesses could lead to improved token utility and increased visibility. For example, if SHIB were to be adopted by a major payment processor or retail brand, it could spark renewed investor enthusiasm.
7. Market Cycles and Altseason Dynamics: Historically, meme coins and smaller-cap tokens often surge during altseason — a market phase when altcoins outperform Bitcoin. If such a cycle emerges, SHIB could benefit from speculative inflows despite weak fundamentals.
8. Shibarium Roadmap and Upgrades: Any announcements regarding technical upgrades, improved scalability, or enhanced security for Shibarium may help restore confidence in the ecosystem.
9. Token Redistribution: Redistribution mechanisms such as staking rewards or liquidity mining incentives could encourage long-term holding, reducing the circulating supply and easing selling pressure.
10. Macroeconomic Trends: Broader economic conditions, including interest rate policies and inflation data, influence investor risk appetite. A shift toward risk-on sentiment could be favorable for high-volatility assets like SHIB.
In conclusion, while Shiba Inu currently faces multiple headwinds — from plummeting burn rates and sluggish network activity to whale sell-offs and technical resistance — the project still holds potential catalysts that, if leveraged effectively, could revitalize its trajectory. However, investors should remain cautious and monitor both technical indicators and ecosystem developments before making any moves.