Shiba Inu Risks Major Correction As Burn Rate Hits New Lows

Shiba Inu’s burn rate drops 85%, signaling weaker token fundamentals.

Whale holdings and network activity sharply decline, hurting investor confidence.

Technical charts suggest more downside with SHIB below key support levels.

Shiba Inu holders are feeling the heat as the meme coin struggles to regain momentum. The token, once hailed as a rising star on the Ethereum network, has lost almost half its value from the year-to-date high. Investors are growing uneasy as fundamentals weaken across the board, signaling that a deeper correction could be on the horizon. The decline in burn rate, trading volume, and network activity paints a worrying picture for SHIB’s near-term outlook.

Falling Burn Rate and Weak Network Activity Raise Alarms

The Shiba Inu ecosystem appears to be losing steam. The token burn mechanism, once a crucial driver of scarcity, has slowed to a crawl. On Tuesday, the burn rate plunged by 85%, removing only 1.6 million tokens from circulation. This slowdown undermines one of the main tools designed to increase value by reducing supply. Activity across the Shibarium network has also dried up. Daily new account creation has dropped below 10, while fewer than 400 accounts remain active.

These figures highlight a steep decline in engagement, which weakens the foundation of the Shiba Inu ecosystem. Developers introduced Shibarium and ShibaSwap to help the token evolve beyond meme status. However, that plan appears to be stalling. Without consistent usage and steady token burns, the ecosystem loses its appeal to both developers and long-term holders.Large holders, often referred to as whales, have also stepped back.

Technical Breakdown Points to More Pain Ahead

Market sentiment mirrors these weakening fundamentals. Futures demand has dropped significantly, with open interest sinking to $67 million from over $600 million earlier this year. This decline signals that traders are scaling back leverage positions while liquidity in the perpetual futures market slips further. On the charts, the damage is clear. The SHIB price has fallen below the lower boundary of a bearish pennant pattern that has formed since early October.

The coin now trades under the key support level of $0.00001, which also marks the lower end of a descending triangle. The drop below the 50-day moving average confirms sustained selling pressure. If the current trend continues, analysts expect the next target around $0.0000085—the lowest level recorded this year. A breakdown below that mark could accelerate losses and deepen the correction.

Shiba Inu’s decline highlights how quickly sentiment can shift when fundamentals weaken. Without renewed demand or stronger network participation, recovery may prove difficult. For now, SHIB investors face a challenging road ahead, as technical and on-chain signals align for more downside pressure.