Shiba Inu (SHIB) price plunged to $0.00001 on Tuesday, marking its lowest level since August 2024. The sharp decline coincided with a $14 billion outflow from Ethereum’s total value locked (TVL) following the launch of the Pectra upgrade testnet on March 5. Technical indicators on the 12-hour SHIB/USDT chart continue to signal bearish momentum, raising concerns among traders and long-term holders alike.
This article dives deep into the current market dynamics affecting SHIB, analyzes the broader implications of declining Ethereum ecosystem activity, and provides a data-driven price forecast for the coming weeks.
Shiba Inu Tests 7-Month Support Amid Meme Coin Sell-Off
Tuesday’s price action saw Shiba Inu drop to $0.000010 — a level not seen in over seven months — before rebounding approximately 6% to trade near $0.000012. Despite this recovery, the rally was met with low trading volume, suggesting weak conviction among buyers.
The sell-off was triggered by a confluence of bearish catalysts:
- Disappointing U.S. non-farm payroll (NFP) data over the weekend dampened risk appetite.
- Escalating trade tensions between the U.S. and Canada on Monday intensified market volatility.
- High-leverage positions in low-liquidity meme coins like SHIB were liquidated en masse.
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Over the past four days, SHIB lost 28.88% of its value, reflecting a broader retreat from speculative assets. While short-term traders attempted to stabilize the price, the lack of strong buying pressure indicates that bearish sentiment remains dominant.
This is not just a standalone correction — it reflects deeper structural trends within the Ethereum ecosystem, where capital is being withdrawn at an alarming rate.
Ethereum TVL Drops $14 Billion After Pectra Upgrade Launch
One of the most significant developments impacting SHIB’s price trajectory is the sharp decline in Ethereum’s total value locked (TVL). According to DeFiLlama, Ethereum’s TVL fell from $101 billion to $87 billion within days of the Pectra upgrade testnet going live on March 5 — a net outflow of $14 billion.
Why TVL Matters for SHIB
Total Value Locked is a critical metric that reflects investor confidence and capital commitment across decentralized finance (DeFi) platforms. A declining TVL suggests:
- Reduced liquidity in DeFi protocols.
- Lower staking and yield farming activity.
- Weaker demand for Ethereum-based tokens, including meme coins like SHIB.
The timing of this outflow is particularly concerning. The Pectra upgrade was expected to enhance network efficiency, reduce gas fees, and improve scalability — all factors that should attract more users and capital. Instead, the opposite has occurred.
Market participants appear skeptical about the upgrade’s immediate benefits, possibly due to:
- Perceived delays in full implementation.
- Broader macroeconomic headwinds affecting crypto markets.
- Regulatory uncertainty surrounding proposed pro-crypto policies.
Moreover, speculation around former U.S. President Donald Trump’s proposed crypto strategic reserve — once a bullish narrative for Ethereum-based assets — has cooled amid growing doubts about congressional approval. This erosion of political tailwinds adds another layer of downside risk for SHIB and similar tokens.
If Ethereum’s TVL continues to decline, it could lead to reduced on-chain activity, thinner order books, and weaker price support for SHIB. In such an environment, even minor sell orders can trigger disproportionate price drops.
Shiba Inu Price Forecast: Bearish Momentum Builds Below Key Levels
Despite a brief intraday recovery, Shiba Inu remains under intense selling pressure. On the 12-hour chart, SHIB is trading at $0.00001188, having briefly touched the critical $0.00001000 support level.
Technical Indicators Signal Continued Downside Risk
Several key technical signals point to sustained bearish momentum:
- Bollinger Bands: The bands are expanding, indicating rising volatility. Price is hugging the lower band, a classic sign of strong downward pressure.
- Volume-Weighted Average Price (VWAP): At $0.00001156, VWAP acts as resistance. Failure to close above this level suggests bulls are losing control.
- BM-X Indicator: This momentum oscillator shows weakening bullish strength, with red zones dominating and green peaks losing steam — a clear sign of deteriorating market sentiment.
Key Support and Resistance Levels
| Level | Type | Significance |
|---|---|---|
| $0.00001124 | Support | Lower Bollinger Band — break could trigger retest of $0.00001000 |
| $0.00001000 | Major Support | Psychological floor; failure may open path to $0.00000950 |
| $0.00001297 | Resistance | Upper Bollinger Band — decisive close above needed for bullish reversal |
| $0.00001470 | Target | Short-term upside target if resistance breaks |
A breakdown below $0.00001124 would likely lead to another test of the $0.00001000 level. If selling pressure intensifies — especially from over-leveraged positions — the next major support lies at $0.00000950.
Conversely, a sustained close above $0.00001297 could reignite bullish momentum, potentially pushing SHIB toward $0.00001470 in the near term. However, given the weak volume and broader ecosystem outflows, such a move appears unlikely without a major catalyst.
Frequently Asked Questions (FAQ)
Q: Why is Shiba Inu price dropping so sharply?
A: The decline is driven by a combination of macroeconomic uncertainty, declining Ethereum TVL post-Pectra upgrade, and mass liquidations in leveraged meme coin positions.
Q: Is the Pectra upgrade bad for Ethereum?
A: Not inherently — Pectra aims to improve scalability and efficiency. However, market sentiment turned negative due to delayed expectations and lack of immediate liquidity inflows.
Q: Can SHIB recover if Ethereum TVL stabilizes?
A: Yes. As a top Ethereum-based meme coin, SHIB benefits from healthy ecosystem activity. Stabilization in TVL could restore investor confidence and support price recovery.
Q: What happens if SHIB breaks below $0.00001?
A: A breakdown could trigger panic selling and extended downside toward $0.0000095 or lower, especially if broader market conditions remain weak.
Q: Are technical indicators reliable for meme coins like SHIB?
A: While meme coins are highly volatile, technical analysis remains useful for identifying key support/resistance levels and momentum shifts — especially when combined with on-chain data.
Q: Should I buy SHIB now or wait?
A: Given current bearish momentum and low volume rebound, waiting for a confirmed reversal above $0.00001297 may offer a safer entry point.
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Conclusion
Shiba Inu is navigating one of its most challenging phases in recent months. With price testing seven-month lows and Ethereum’s ecosystem experiencing significant capital outflows, near-term sentiment remains bearish.
While short-term rebounds are possible, sustained recovery will require both a stabilization in Ethereum’s TVL and renewed investor confidence in upcoming network upgrades. Until then, traders should remain cautious, monitor key technical levels closely, and prepare for continued volatility.
For investors tracking meme coin trends and DeFi ecosystem health, the current phase offers valuable insights into how macro narratives, technical upgrades, and market psychology intersect in the crypto space.
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