Once a dominant force by market capitalization, the self-proclaimed Dogecoin killer has seen a steep decline in recent months and now stands as a mere shadow of its former glory.
Multiple factors suggest the meme coin may suffer even greater losses in the near future, while a key technical indicator signals that a short-term recovery is also plausible.
The Crash Has Yet to Begin?
Currently, Shiba Inu (SHIB) is worth around $0.000004697 (per CoinGecko), representing a whopping 65% decline over the past year. To make matters worse, the coin has collapsed by nearly 95% since the all-time high reached at the end of 2021.
For years, SHIB stood as the second-largest meme coin, trailing only Dogecoin (DOGE). But its market cap fell well below $3 billion, and it was overtaken by MemeCore (M), which surged toward a $4 billion valuation.
The token’s poor performance comes alongside a declining trading volume, which has plummeted by 84% over the last 12 months, and an overall reduction in interest in meme coins. Such a low figure usually signals weak market participation and fading conviction among traders and investors: a factor that could hamper a potential revival for SHIB.
The coin’s burn rate, which has fallen by 71% over the past week, is another cause for concern. The mechanism’s ultimate goal is to reduce the overall supply of Shiba Inu and increase its value through scarcity. Since the program launched, the team and community have scorched more than 40% of the supply, but with almost 590 trillion tokens still in circulation, the total remains quite high.
Next on the list is Shibarium’s stalled activity. Shiba Inu’s layer-2 scaling solution officially saw the light of day in the summer of 2023, designed to advance the project by improving speed, enhancing scalability, and reducing transaction fees. At first, the protocol facilitated millions of daily transactions, but an exploit last year changed things for the worse, and the figure has since drastically declined.
The Bright Side
Amid a landscape filled with worrying signals, Shiba Inu’s Relative Strength Index (RSI) stands out as one of the few indicators signaling that a short-term rebound is possible.
The technical analysis tool’s ratio has dropped below 30, indicating that the meme coin’s price has fallen too much in a short period and could be due for a resurgence. The RSI ranges from 0 to 100, and readings above 70 suggest SHIB has entered overbought territory, which may be a precursor to an impending pullback.
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