Why Shiba Inu Is Falling: The Main Reasons Behind the Meme Coin’s Decline

Shiba Inu (SHIB), once a superstar among meme coins, has turned into a “fallen angel.” The token is now trading at $0.00001013, down 70% from its November high and over 88% from its all-time peak. Despite the team’s ambition to transform SHIB from a joke coin into a serious blockchain project, reality paints a very different picture — and the reasons behind its decline are clear.

The Meme Coin Hype Has Faded The once-booming hype around meme coins has cooled significantly in recent months. Nearly every major meme coin — including Pepe, Bonk, Pudgy Penguins, Floki, and Official Trump — has suffered double-digit losses. For instance, Pepe alone has lost more than $7 billion in market value since its November peak. Meanwhile, investors have shifted focus toward “safer” and more established assets like Bitcoin, Ethereum, and XRP. The Altcoin Season Index (ASI) has dropped to 26 points, while Bitcoin’s market dominance continues to rise.

Shibarium’s Promise Fizzled Out One of the key milestones for the Shiba Inu ecosystem was the 2023 launch of Shibarium, its Layer-2 blockchain network. It was meant to mark Shiba Inu’s evolution from a meme coin to a utility token. However, data tells a disappointing story. According to DeFi Llama, Shibarium has only 18 active developers, and its Total Value Locked (TVL) has plummeted to just $878,000 — turning it into a near-abandoned network. The network has also failed to attract stablecoins or major DeFi projects, while competitors like Arbitrum, Base, and Linea have surged ahead. To make matters worse, a recent hack on ShibaSwap, the project’s flagship dApp, forced developers to suspend the network bridge, halting on-chain activity and slowing down SHIB token burns, which were meant to support price growth.

Whales and Smart Money Are Selling Off Data from Nansen shows that large holders — or whales — have been aggressively offloading SHIB over recent months, reducing their holdings to the lowest level in a long time. The same trend can be seen among smart money investors, who are also exiting their positions, signaling waning confidence in the token’s future performance. At the same time, trading volumes on both spot and derivatives markets have dropped significantly, suggesting weakening liquidity and fading interest among both retail and institutional players.

Technical Signals Point to Further Downside From a technical standpoint, Shiba Inu remains below both its 50-day and 100-day EMA, indicating strong bearish control. The chart also shows a descending triangle pattern, typically a precursor to further decline. SHIB is also trading below the Ichimoku cloud, another bearish signal. Analysts are watching $0.000006946 as a key support level — a break below it could trigger deeper losses.

Summary: Shiba Inu Is Fighting for Its Second Chance After years of hype and explosive growth, Shiba Inu is facing a harsh correction. The combination of fading excitement, weak network adoption, and whale sell-offs has put the project under pressure. Whether SHIB can rise again will depend on the developers’ ability to deliver real utility and value, turning it back into a serious blockchain asset — not just another meme.

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