Is Shiba Inu (SHIB) Entering a Sustainable Recovery or Merely a Pause in the Downtrend?

The question of whether Shiba Inu (SHIB) is poised for a sustainable recovery or merely experiencing a temporary reprieve in its long-term downtrend hinges on a nuanced interplay of technical indicators and market sentiment. While token burns and ecosystem developments have injected periodic optimism, the broader narrative remains dominated by bearish signals and structural challenges.

Technical Analysis: Bearish Momentum Prevails

From a technical perspective, SHIB's price action in late 2025 paints a grim picture. The 50-day and 200-day moving averages, both critical benchmarks for trend identification, are in a downward trajectory, with the 50-day line currently acting as a dynamic resistance level above the price. This configuration-a short-term moving average falling below its longer-term counterpart-typically signals a bearish bias. Compounding this, the Moving Average Convergence Divergence (MACD) has recently registered a bearish crossover, reinforcing expectations of further downward pressure.

The Relative Strength Index (RSI), a momentum oscillator, offers a mixed signal. At 45.90 on a weekly basis, the metric hovers near neutrality, suggesting neither overbought nor oversold conditions according to technical analysis. However, this equilibrium masks the broader context: SHIB's price has spent much of 2025 consolidating within a descending channel, with volume surging during sell-offs-a classic sign of capitulation rather than accumulation. Immediate support is clustered around $0.000012 USD, while resistance lies between $0.000013 and $0.000014 USD. A breakout above these levels could signal a short-term recovery, but given the declining 200-day moving average and bearish MACD, such a move is more likely to represent a countertrend rally than a sustained reversal.

SHIB's price chart displayed on a dark-themed trading screen, showing a descending trend with red candles dominating the pattern. The 50-day and 200-day moving averages are plotted in different shades of red, clearly sloping downward. A bearish MACD crossover is visible in the lower pane, with a histogram shrinking to the right as bearish momentum builds. The RSI indicator in the middle pane hovers near the neutral 50-line, illustrating a lack of clear overbought or oversold conditions.

Token burns, which have reduced SHIB's circulating supply, have failed to alter this trajectory. While supply contraction theoretically increases scarcity, the sheer magnitude of SHIB's total supply-over 1 quadrillion tokens-means even significant burns have minimal near-term impact on price. As one analyst notes, "The market has priced in these burns for years; without a corresponding increase in demand, they remain a symbolic gesture" according to market analysis.

Market Sentiment: Caution Over Confidence

Market sentiment for SHIB in 2025 reflects a fragile balance between speculative hope and institutional skepticism. The Fear and Greed Index, a composite of social media activity, trading volume, and volatility, currently reads at 26-a level indicative of extreme caution. This aligns with on-chain data showing polarized trader behavior: while retail investors occasionally drive short-lived rallies, institutional capital has largely disengaged, viewing SHIB as a high-risk, low-utility asset.

Ecosystem developments, such as the Shibarium layer-2 network and decentralized exchange initiatives, have kept SHIB from being entirely dismissed as a "dead coin." These projects aim to reduce transaction costs and enhance utility, yet they face an uphill battle against newer meme tokens with more aggressive marketing and community-driven narratives according to industry analysis. As of late 2025, SHIB's large supply and meme-driven branding continue to deter institutional adoption, with many investors treating it as a speculative play rather than a foundational asset.

Trader psychology further complicates the outlook. With 84% of traders anticipating a downward trend, bearish expectations are self-reinforcing according to market data. This sentiment is exacerbated by macroeconomic headwinds, including tightening monetary policy and regulatory scrutiny of low-cap cryptocurrencies. A bearish scenario becomes more likely if liquidity dries up or whale activity intensifies, as SHIB's price is highly susceptible to large-scale selling.

Conclusion: A Pause, Not a Pivot

The evidence suggests SHIB is more likely in a temporary pause within its long-term downtrend than the start of a sustainable recovery. Technically, bearish momentum remains intact, with key indicators like the MACD and moving averages pointing lower. On the sentiment front, caution dominates, with both retail and institutional actors treating SHIB as a high-volatility asset rather than a long-term investment. While ecosystem upgrades and token burns provide a floor to prevent total collapse, they lack the scale or novelty to drive a meaningful re-rating.

For traders, the path forward involves close monitoring of price action around critical support and resistance levels. A sustained break above $0.000014 USD could attract short-term buyers, but a breakdown below $0.000012 would likely accelerate the bearish scenario. Investors, meanwhile, should remain skeptical of narratives framing SHIB as a "rebound story"-until fundamentals shift, this remains a coin defined by survival rather than resurgence.