Shiba Inu Faces 20% Drop Risk as Bearish Pattern and Weak On-Chain Metrics Emerge

Shiba Inu (SHIB) is currently under pressure as technical and on-chain indicators suggest a key breakdown may be imminent. Traders are closely watching the price action as the token struggles to break above critical resistance levels, with a classic bearish head-and-shoulders pattern forming on price charts. If this pattern completes, it could signal a sharp decline, potentially driving SHIB down to as low as $0.00001027, which would represent a roughly 20% drop from its current level [1].

The technical weakness is reinforced by deteriorating on-chain metrics. The number of new investor addresses interacting with the token has declined, suggesting waning interest and reduced demand [2]. Additionally, whale activity—once a sign of institutional confidence—has all but vanished, further deepening concerns about the token’s future. This lack of engagement among large holders has contributed to a shrinking investor base and declining network liquidity.

The broader Shiba Inu ecosystem is also showing signs of distress. Shibarium, the project’s layer-2 solution, has seen a drastic drop in Total Value Locked (TVL), currently sitting at just $1.69 million [1]. This decline highlights a loss of confidence within the platform and raises questions about the sustainability of the project’s long-term vision. The shrinking TVL suggests that capital is exiting the ecosystem, compounding the bearish sentiment already present in the token’s price action.

Despite a recent 5% price increase in a 24-hour period—fueled by a 1,550% surge in token burns—the upward movement has not been enough to reverse the larger trend [3]. Analysts remain cautious, noting that while short-term optimism exists, any meaningful recovery will require SHIB to break decisively above $0.000015, a level that has repeatedly resisted upward attempts. Until that happens, the risk of a further decline remains high.

A growing number of traders are aligning with the bearish view, citing the formation of a death cross—a technical indicator that historically signals a prolonged downturn—as a key warning sign [6]. Meanwhile, some optimistic forecasts suggest a potential rebound to the $0.000016–$0.000017 range in the coming weeks, but these projections remain conditional on overcoming key resistance and support levels [1].

SHIB’s volatility is further amplified by its dependence on speculative momentum rather than strong fundamentals. Unlike more established cryptocurrencies, Shiba Inu lacks a clear use case or real-world utility, making it highly susceptible to shifts in market sentiment. Analysts caution that unless there is a fundamental shift in investor behavior or broader market conditions improve, the bearish trajectory is likely to continue.

With weak on-chain data, a deteriorating ecosystem, and bearish technical patterns all pointing to a potential breakdown, Shiba Inu faces a critical test in the coming weeks. Traders will be watching for any signs of strength, but for now, the risk of a 20% price drop looms large.

Source:

[1] The Tradable – [https://thetradable.com/crypto/shiba-inu-coin-news-alert-headandshoulders-pattern-threatens-20-drop-to-000001027-2--a](https://thetradable.com/crypto/shiba-inu-coin-news-alert-headandshoulders-pattern-threatens-20-drop-to-000001027-2--a)

[2] Blockchain News – [https://blockchain.news/postamp?id=20250816-price-prediction-target-shib-bearish-000001-as-critical-support-at](https://blockchain.news/postamp?id=20250816-price-prediction-target-shib-bearish-000001-as-critical-support-at)

[3] XT.com – [https://www.xt.com/en/blog/community-news/2025-08-16T19:25:00.000Z](https://www.xt.com/en/blog/community-news/2025-08-16T19:25:00.000Z)

[6] Bitget – [https://www.bitget.com/price/shiba-ai-(new)](https://www.bitget.com/price/shiba-ai-(new))