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The Shiba Inu token known as one of the best meme coins in the crypto market is attempting to stabilize after shedding value earlier this month, with the cryptocurrency markets plunging in response to news of the collapse of the Terra stablecoin. But nothing seems helpful and many experts predict that Shiba Inu will continue to drop this year before making a dramatic comeback. SHIB did get a boost of 21% when popular trading platform Robinhood listed the coin for trading on 12 April. But it has been downhill since then. The SHIB/USD price has dropped by more than 40% since the start of the month and has lost 65% since the start of 2022.
No one could have expected the incredible success of Shiba Inu in 2021 (except for the trader who turned an US$8,000 investment into US$5.6 billion in a matter of 400 days with Shiba Inu). SHIB is extremely volatile, and the token is down quite a bit from its peak. The incredibly popular Dogecoin led the rise of meme coins, and Shiba Inu Token (the breed of dogecoin's dog mascot) is evidence.
One of the biggest reasons is that the whole Crypto market is down so is Shiba but sudden drops in Shiba Inu prices are mostly related to panic selling by the holders. Even a small drop in price sometimes triggers panic selling as people are afraid of losing money but holding and buying the dip seems to be the best option. The biggest challenge for the SHIB project is its utility. The Shiba token grew out of hype and not because of products. That's why when the hype started slowing, the price started to drop and has been plummeting since then. The Shiba team is now working on building products for its ecosystem, but the pace has been slow.
Also, the Shiba Inu coin faces a looming threat from the sale of $1 trillion SHIB held by the ShibArmy. The meme coin's burn rate witnessed a massive decline, down 75% overnight. Shiba Inu's burn rate took a hit, dropping 75% overnight. After a massive burn at the beginning of the week, SHIB burn has slowed down. Based on data from the Shibburn portal, 34.72 million Shiba Inu tokens were burnt in the last 24 hours. Nearly 41% of Shiba Inu's circulating supply has been burned. 55.6% of Shiba Inu tokens remain in circulation across exchanges.
Another threat for SHIB is the fact that its exchange reserves have plummeted. Investors have amassed around 1.02 trillion SHIB, which is worth about US$10.6 million. These tokens have all been pulled out of SHIB's circulating supply. If SHIB were to see a trend reversal, there is a possibility that over US$1 trillion in SHIB coins will hit exchanges. This will then increase the selling pressure which will then lead to a drop in price.
Proponents believe Shiba Inu's burn is a key driver of bullish sentiment in the ShibArmy. The so-called Dogecoin-killer's price has plummeted 88% from its all-time high and continues to decline. Shiba Inu holders have dumped the meme coin and taken profits consistently.
However, Shiba Inu's collapse is likely to continue while it is impossible to predict the future, Shiba Inu's weak fundamentals and concentrated ownership make it a high-risk asset. And the token's valuation is likely to continue collapsing in 2022.
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