Whales Trigger 43% Decline in Shiba Inu Amid Ecosystem Challenges

Shiba Inu (SHIB) is under increasing strain as its value keeps sliding, influenced by technical shortcomings, ecosystem setbacks, and changing investor attitudes. The token has dropped to $0.0000099, marking a 43% decrease from its yearly high and standing 70% below its peak in November 2024, according to a

. Experts link this decline to a sharp reduction in the burn rate, persistent troubles with the Shibarium layer-2 platform, and heavy selling by major holders, known as "whales."

The burn rate—the pace at which

tokens are taken out of circulation—has dropped significantly, partly because of decreased activity on Shibarium, as CoinMarketCap notes. Shibarium, introduced in 2023 as a major utility project, has struggled to attract users, with its total value locked (TVL) falling to $878,000 and only 18 developers actively participating, according to an . A recent security breach at ShibaSwap, the network’s main decentralized exchange, has further shaken the ecosystem, leading developers to halt essential infrastructure, the Invezz report adds.

Large holder activity has worsened the decline. Nansen data reveals major outflows from top SHIB holders, who have cut their positions to the lowest levels in months, as Invezz reports. Savvy investors have followed suit, selling off their holdings amid expectations of further losses. On-chain indicators point to continued bearishness, with SHIB trading below important moving averages and displaying descending triangle and bearish flag formations on daily charts, according to Invezz. Analysts caution that if SHIB falls below $0.000006946, it could prompt even more selling.

Past performance also urges caution. Over the last four Novembers, SHIB has averaged a 0.26% return but suffered a median loss of 9.1%, highlighting seasonal risks, according to a

. Although there were brief rebounds in 2023 and 2024, including a 48.8% jump in 2024, earlier years like 2021 and 2022 saw average drops of 27%, Coinotag data indicates. Broader economic factors, such as uncertainty over Federal Reserve policies and U.S.-China trade relations, have also pressured risk assets, with SHIB tumbling 7.3% in a single day during a wider crypto sell-off, as covered by .

Despite these headwinds, some experts point to possible triggers for recovery. Community-led efforts and upgrades within the ecosystem may help renew interest, though Shibarium’s ongoing difficulties remain a concern. For now, investors are encouraged to keep an eye on blockchain activity and global economic trends as SHIB navigates a precarious environment.