Shiba Inu (SHIB) once the darling of meme coin investors is struggling to regain momentum after a steep sell-off. The token has now fallen more than 60% from its November highs, and key technical and on-chain indicators suggest more pain could be ahead.
Weak On-Chain Metrics Add to Selling Pressure
According to data from Shibburn, Shiba Inu’s burn rate plunged 72% on August 12, with only 181,928 SHIB tokens burned worth barely $2.
Historically, the SHIB price tends to perform better when burn activity accelerates, since a higher burn rate reduces circulating supply and boosts investor sentiment. But with the metric sliding sharply, market enthusiasm has faded.
At the same time, Shibarium, the project’s Layer-2 blockchain, is showing similar signs of fatigue. Its total value locked (TVL) has dropped 10% in the past month to $1.75 million, a tiny fraction of the $300 billion DeFi market. The slowdown in developer and user activity suggests limited traction for the network a worrying sign for long-term growth.
Investor Interest Is Fading
Across exchanges, trading activity has fallen dramatically. Shiba Inu’s 24-hour trading volume now sits at $222 million, far below Dogecoin’s $1.7 billion and even Pepe’s $698 million.
Open interest in SHIB futures has also dropped below $155 million, reflecting a lack of speculative momentum. Meanwhile, whale accumulation has stalled.
Data from Nansen shows that large holders still control 104.68 billion SHIB, unchanged since July 21, while so-called “smart money” investors wallets known for profitable trades have reduced their holdings by 22% over the past month to 40.25 billion SHIB.
These metrics are important because whales and institutional-style traders often drive liquidity and trend direction. Their absence signals weak confidence among sophisticated investors.
Competition From Solana Meme Coins Intensifies
Another factor dragging on SHIB’s performance is the rise of new meme coins particularly those built on the Solana network, which has become the latest hotbed for community-driven tokens.
With traders rotating into fresher narratives and faster ecosystems, Shiba Inu’s relevance as a top meme coin has been challenged.
Still, there’s a small silver lining: the supply of SHIB on exchanges has continued to decline, currently sitting at 278 billion tokens, down from 285 trillion last month indicating that some investors are moving their holdings into self-custody rather than selling outright.
Technical Analysis: Bearish Flag Signals Trouble
On the technical front, Shiba Inu’s three-day chart shows the token consolidating within a bearish flag pattern — typically a continuation signal that suggests more downside after a steep drop.
Since February, SHIB has been trading in a tight range between $0.00001070 (support) and $0.00001750 (resistance). The price is currently below both the 50-day and 100-day exponential moving averages (EMAs), confirming that bears remain in control.
If SHIB breaks below $0.00001070, the pattern would confirm a bearish continuation, potentially opening the door to deeper losses in the short term.
The Outlook: More Downside Unless Sentiment Improves
For now, Shiba Inu remains under pressure both technically and fundamentally. The falling burn rate, stagnant whale activity, and fading Shibarium adoption all point to a market losing faith in the token’s near-term prospects.
To reverse the trend, SHIB would need a significant spike in on-chain activity or a broader meme coin rally to lift sentiment.
Until then, the meme coin that once captured crypto’s imagination may continue to struggle under the weight of its own supply and fading hype.
