Shiba Inu Price Slides 60% as Burn Rate and TVL Plummet

Shiba Inu’s price has already fallen by over 60% from its November 2023 highs, and both technical and fundamental indicators suggest a further decline in the near term [1]. The cryptocurrency, once one of the most prominent meme coins on Ethereum, has seen a sharp deterioration in key metrics that have historically supported price stability and growth [2].

One of the most concerning developments is the sharp drop in the SHIB burn rate. According to Shibburn, the burn rate dropped by 72% on Tuesday, August 12, to 181,928 tokens, equivalent to just $2 [1]. A declining burn rate signals higher inflationary pressure, which generally weakens investor sentiment and reduces demand for the token [2].

The performance of Shibarium, Shiba Inu’s layer-2 network, has also been disappointing. Total value locked (TVL) has fallen by 10% in the past 30 days to $1.75 million, placing it as a minor player in a broader decentralized finance (DeFi) space where TVL stands at nearly $300 billion [1]. This indicates a lack of developer and investor interest in the project’s infrastructure.

Investor demand has weakened significantly this year. SHIB’s 24-hour trading volume currently stands at $222 million, well behind Dogecoin’s $1.7 billion and Pepe’s $698 million [1]. Futures open interest has also dropped to below $155 million, reflecting reduced speculative activity and trading interest.

According to Nansen data, whale and smart money investors—regarded as more sophisticated and experienced—are no longer accumulating Shiba Inu [1]. Whale holdings have remained unchanged at 104.68 billion tokens since July 21, while smart money holdings have fallen 22% in the past 30 days to 40.25 billion [1]. This trend signals a loss of confidence among key investor groups.

Shiba Inu’s weak performance is partly attributed to a shift in investor focus toward newer meme coins, especially within the Solana ecosystem [1]. This has reduced demand for SHIB and contributed to its prolonged underperformance compared to other meme tokens.

Technically, SHIB has moved sideways since February, trading between a support level of $0.00001070 and resistance at $0.00001750 [1]. The price has formed a bearish flag pattern, characterized by a vertical decline followed by a horizontal consolidation. A breakdown below the support level of $0.00001070 would confirm the bearish trend and signal further downside [1]. SHIB has also fallen below both the 50-day and 100-day Exponential Moving Averages, reinforcing the dominance of bearish sentiment.

Despite these concerns, one positive sign is the continued decline in exchange supply. Currently at 278 billion SHIB, exchange supply has fallen from a high of 285 trillion in recent months [1]. A declining supply can support price stability by reducing the amount of SHIB available for immediate selling [1].

[1] Source: [Shiba Inu price at risk as crucial metrics dip](https://coinmarketcap.com/community/articles/689b3d17941a4f7ee8517e80/)