Whales Drive Shiba Inu's 43% Drop as Ecosystem Struggles

Shiba Inu (SHIB) faces mounting pressures as its price continues to decline, driven by a combination of technical weaknesses, ecosystem challenges, and shifting investor sentiment. The token has fallen to $0.0000099, a 43% drop from its annual high and 70% below its November 2024 peak, according to a CoinMarketCap report. Analysts attribute the slump to a deteriorating burn rate, ongoing issues with its Shibarium layer-2 network, and aggressive selling by large holders, or "whales."

The token's burn rate-the rate at which SHIB is removed from circulation-has plummeted, partly due to stalled activity on Shibarium, as CoinMarketCap reports. Launched in 2023 as a key utility-driven initiative, Shibarium has failed to gain traction, with total value locked (TVL) collapsing to $878,000 and just 18 developers actively engaged, according to an Invezz analysis. A recent hack of ShibaSwap, the network's primary decentralized exchange, further destabilized the ecosystem, forcing developers to pause critical infrastructure components, the Invezz piece adds.

Whale activity has exacerbated the downturn. Data from Nansen shows significant outflows from large SHIB holders, who have reduced holdings to multi-month lows, as reported by Invezz. Smart money investors have mirrored this trend, dumping shares amid expectations of further declines. On-chain metrics reinforce bearish sentiment, with SHIB trading below key moving averages and forming descending triangle and bearish flag patterns on daily charts, the Invezz analysis notes. Analysts warn that a break below $0.000006946 could trigger additional selling.

Historical trends add to the caution. Over the past four Novembers, SHIB has averaged a 0.26% return but posted a -9.1% median loss, underscoring seasonal vulnerabilities, according to a Coinotag analysis. While 2023 and 2024 saw brief recoveries, including a 48.8% surge in 2024, earlier years like 2021 and 2022 saw average declines of 27%, Coinotag data shows. Recent macroeconomic factors, including Federal Reserve policy uncertainty and U.S.-China trade developments, have also weighed on risk assets, with SHIB declining 7.3% in a single day alongside broader crypto market sell-offs, as reported by Yahoo Finance.

Despite these challenges, some analysts highlight potential catalysts for stabilization. Community-driven initiatives and ecosystem upgrades could reignite interest, though Shibarium's struggles remain a hurdle. For now, investors are advised to monitor on-chain activity and macroeconomic signals as SHIB navigates a fragile landscape.