Shiba Inu's Bearish Pressures and Path to Yearly Lows

The Shiba Inu (SHIB) ecosystem has entered a critical phase in late 2025, marked by deteriorating on-chain metrics, bearish technical indicators, and a fragmented market sentiment. While retail enthusiasm and layer-2 innovations like Shibarium have historically buoyed SHIB's narrative, recent data suggests a confluence of short-term downside risks that could push the token toward its yearly lows. This analysis synthesizes on-chain activity, technical trends, and market dynamics to assess the trajectory of SHIB in the coming months.

On-Chain Deterioration: Active Addresses and Transaction Volume

Q4 2025 has witnessed a sharp decline in SHIB's on-chain vitality. Active addresses and transaction volume, once key drivers of the token's utility, have contracted significantly. For instance, a net outflow of 125.9 billion SHIB from exchanges was recorded in a single 24-hour period, reflecting reduced trading activity among large holders. Similarly, a 45.2 billion SHIB withdrawal on December 8, 2025-the largest since April signals a shift toward self-custody rather than active trading. These movements, while often interpreted as long-term accumulation, are juxtaposed with a record 1,000,000,000 SHIB sell-off in November 2025, underscoring the asset's volatility.

The broader picture is equally concerning. SHIB's quarterly performance has been abysmal, with a -37.3% decline in Q4 2025, driven by monthly losses of -15.2% in October, -16.2% in November, and -11.6% in December. This aligns with weak transaction volume trends, as the token's ecosystem struggles to sustain user engagement amid broader crypto market stagnation.

Technical Indicators: Bearish Momentum and Oversold Conditions

Technical analysis reinforces the bearish narrative. The Moving Average Convergence Divergence (MACD) for SHIB has remained below the signal line, with a bearish crossover observed in late December 2025. While the histogram bars show a slight upward tick, suggesting potential exhaustion of downward momentum, the price remains below critical moving averages (50-day, 200-day EMA), a hallmark of a downtrend.

The Relative Strength Index (RSI) hovers near 34.9, teetering on the edge of oversold territory but failing to trigger a meaningful rebound. Key support levels, such as $0.00000976 (S1) and $0.00000528 (S2), remain untested, but the path to the yearly low of $0.00000000008165 appears increasingly plausible. The Fear & Greed Index, currently at 17 (Extreme Fear), further underscores the psychological toll on investors.

Market Cap and Ecosystem Dynamics

SHIB's market capitalization has contracted to $4.3 billion as of December 2025, down from $5.21 billion earlier in the year. This decline coincides with a drop in its CoinMarketCap rank to 24th, reflecting diminished institutional and retail interest. While the token's ecosystem-anchored by ShibaSwap and Shibarium-remains operational, the lack of meaningful innovation or adoption has left SHIB vulnerable to broader market headwinds.

Wallet distribution trends also highlight structural risks. The burn address controlled by Vitalik Buterin holds 41.04% of the total supply, while exchange wallets like Robinhood and Binance collectively hold 287 trillion SHIB-the lowest exchange-reserve level in months. This concentration, while potentially stabilizing in the long term, exacerbates short-term liquidity constraints and amplifies price swings.

Path to Yearly Lows: Risks and Mitigating Factors

The confluence of on-chain and technical factors points to a high probability of SHIB testing its yearly lows. A critical support level at $0.0000063511 (1.618 Fibonacci extension) could become a focal point for bears. However, mitigating factors exist. For instance, 67.9% of top Binance traders maintain long positions, signaling conviction in a potential rebound. Additionally, the token's base-building phase around $0.000007 suggests a possible consolidation before further declines.

That said, the broader crypto market's corrective phase-marked by underperformance in Bitcoin and Ethereum-casts a long shadow over SHIB's prospects. Analysts remain divided, with 19 out of 24 experts recommending selling the asset amid its 65.6% annual decline.

Conclusion

Shiba Inu's bearish pressures in late 2025 are multifaceted, driven by on-chain deterioration, weak technical indicators, and a fragile market cap. While whale activity and retail sentiment hint at potential resilience, the immediate outlook remains dire. Investors should closely monitor key support levels and on-chain outflows, as the path to yearly lows could accelerate in early 2026. For now, caution is warranted, as SHIB's ecosystem navigates a challenging macroeconomic environment.