Once a market-cap powerhouse, the self-proclaimed Dogecoin killer has plunged sharply in recent months and is now only a fraction of its former prominence.
Several factors indicate the meme coin could face further losses in the near term, though a key technical indicator points to the possibility of a short-term recovery.
The Crash May Be Unfolding
At the time of writing, Shiba Inu (SHIB) trades at approximately $0.000004697 (per CoinGecko), reflecting a roughly 65% decline over the past 12 months. Since its all-time high at the end of 2021, the token has lost nearly 95% of its value.
For years SHIB was the second-largest meme coin after Dogecoin (DOGE). Its market capitalization has fallen well below $3 billion, and the token was surpassed by MemeCore (M), which rose toward a $4 billion valuation.
SHIB’s weak performance is accompanied by a sharp drop in trading volume, which has fallen about 84% over the last year, signaling reduced market participation and a waning interest in meme coins generally. Low volume often reflects fading trader conviction and can make it harder for a token to stage a sustained recovery.
Another worrying metric is the burn rate, which declined by roughly 71% over the past week. Token burning is intended to reduce circulating supply and increase scarcity over time. Although the community and team have retired a substantial portion of the supply since the program began, nearly 590 trillion tokens remain in circulation, leaving overall supply still elevated.
Activity on Shibarium, the project’s layer-2 scaling solution, has also stalled. Launched in summer 2023 to improve speed, scalability, and reduce fees, Shibarium initially supported millions of daily transactions. However, an exploit last year undermined confidence and usage, and transaction counts have since dropped significantly.
The Potential Upside
Despite these concerning trends, one technical measure suggests a short-term rebound could be possible: the Relative Strength Index (RSI).
SHIB’s RSI has dropped below 30, a level typically interpreted as oversold. When the RSI falls into oversold territory, it indicates that an asset’s price has fallen sharply over a short period and may be poised for a corrective bounce. The RSI scale runs from 0 to 100; readings above 70 are generally considered overbought and can precede pullbacks, while readings below 30 may signal potential buying interest returning.
In summary, Shiba Inu faces multiple headwinds: steep price declines, dwindling trading volume, a falling burn rate, and reduced activity on its layer-2 network. These factors keep downside risk elevated. However, the RSI’s oversold reading suggests a short-term bounce remains a realistic possibility, though any recovery would need stronger volume, renewed on-chain activity, and meaningful changes to supply dynamics to be sustained.