Why Shiba Inu Price Keeps Falling - Complete Analysis

Shiba Inu (SHIB) has experienced a significant decline, losing more than 11% of its value in June 2025, with the downward trend continuing into July. As of July 2nd, the Shiba Inu price trades at $0.0000113, while daily trading volumes have contracted to just $94 million. This comprehensive analysis explores the five critical factors driving SHIB's price decline and what investors should expect in the coming weeks.

Key Highlights

The current market conditions show several concerning indicators for Shiba Inu holders. Reduced interest from whales, retail traders, and futures market participants has created a perfect storm of selling pressure. Additionally, declining network activity on the Shibarium blockchain has further contributed to the price deterioration.

Technical analysis reveals a rounded top pattern formation, which historically signals potential for an additional 40% price crash. This bearish formation, combined with fundamental weaknesses, suggests continued downward pressure on SHIB prices.

Top 5 Reasons Behind Shiba Inu Price Decline

1. Whale Activity Drops Dramatically

The primary driver of Shiba Inu's price decline stems from reduced whale activity. Large wallet holders, who typically influence significant price movements, have become notably inactive. IntoTheBlock data reveals that large transactions exceeding $100,000 have plummeted to 1.09 trillion tokens, representing a 24-fold decrease from June's peak of 24 trillion tokens.

This dramatic reduction in whale activity directly impacts price stability. When major holders reduce their trading activity, it creates a demand vacuum that smaller investors cannot fill, leading to sustained price pressure.

2. Shibarium Network Activity Declines

The Shibarium network, Shiba Inu's dedicated blockchain, has experienced a significant decline in Total Value Locked (TVL). According to recent data, TVL dropped from $6.44 million in December 2024 to just $1.78 million currently. This represents a substantial decrease in network utilization and investor confidence.

Declining network activity has multiple negative implications for SHIB price. Reduced TVL indicates lower demand for the token within its ecosystem, while decreased activity has also negatively impacted the SHIB burn rate, slowing the token's deflationary mechanism.

3. Active Addresses Hit Annual Low

Retail demand serves as a crucial driver for meme coin performance, and current metrics show concerning trends. Daily active addresses have fallen to 2,902 over the past seven days, marking the lowest level in over one year. This metric directly correlates with retail investor interest and trading activity.

The sharp decline in active addresses indicates waning retail enthusiasm for SHIB. Without consistent retail demand, meme coins struggle to maintain price levels, as these tokens rely heavily on community engagement and trading volume.

4. Broader Meme Coin Market Weakness

Shiba Inu's price decline reflects broader weakness across the meme coin sector. The total market capitalization of meme coins has contracted from $64 billion to $52 billion within just 30 days, representing a significant capital outflow from the sector.

This sector-wide decline suggests that investors are rotating away from meme coins toward more established cryptocurrencies like Bitcoin. The shift in investor preference creates additional selling pressure on SHIB as it competes for attention within a shrinking market segment.

5. Futures Market Interest Evaporates

Futures market data reveals diminishing interest from derivative traders. Open interest has declined by more than $140 million over the past two months, indicating reduced willingness to take leveraged positions on SHIB price movements.

The futures market often serves as a leading indicator of price direction. When traders reduce their positions, it suggests uncertainty about future price movements and can precede significant price volatility.

Technical Analysis: 40% Crash Warning

The Shiba Inu price chart displays a classic rounded top pattern, one of the most reliable bearish formations in technical analysis. This pattern indicates gradual price deterioration rather than sudden crashes, often leading to sustained downward moves.

The pattern's neckline support sits at $0.00001058, and a breakdown below this level could trigger a 40% decline to approximately $0.00000634. This target represents a measured move based on the pattern's height and provides a potential downside objective for traders.

The Relative Strength Index (RSI) remains near the neutral 50 level, indicating sustained bearish momentum over the past month. This technical indicator supports the bearish outlook suggested by the rounded top formation.

Potential Recovery Scenarios

Despite the overwhelming bearish signals, some technical indicators suggest potential for recovery. The Awesome Oscillator (AO) histograms show signs of turning green, which could indicate weakening bear momentum.

For a genuine recovery, SHIB would need to break above the rounded top's highest point at $0.0000176. Such a move would invalidate the bearish pattern and potentially trigger a significant rally. However, this scenario requires substantial buying pressure that current market conditions don't support.

Market Outlook and Investment Implications

The convergence of fundamental and technical factors suggests continued pressure on Shiba Inu prices. Declining whale activity, reduced network utilization, and broader meme coin weakness create a challenging environment for SHIB recovery.

Investors should monitor key support levels and network activity metrics for signs of stabilization. Any recovery would likely require renewed interest from large holders and improved sentiment toward meme coins generally.

Risk Factors to Monitor

Several risk factors could accelerate SHIB's decline. Continued whale inactivity, further Shibarium network degradation, or additional meme coin sector weakness could push prices toward the 40% crash target.

Conversely, positive developments in the Shiba Inu ecosystem, broader crypto market recovery, or renewed meme coin interest could help stabilize prices above current levels.

Conclusion

Shiba Inu's current price decline results from multiple converging factors including whale inactivity, declining network activity, reduced retail interest, sector-wide weakness, and diminishing futures market participation. The technical formation of a rounded top pattern suggests potential for additional 40% downside to $0.00000634.

While some indicators show early signs of momentum shift, the overall outlook remains bearish until fundamental conditions improve. Investors should carefully consider these factors when making investment decisions and maintain appropriate risk management strategies.

The combination of technical and fundamental analysis suggests that SHIB faces significant challenges ahead, making careful monitoring of key metrics essential for anyone holding or considering positions in this meme coin.