What's Behind Shiba Inu's Recent Pullback: A Closer Look at the 5%+ Slide

Over the last 24 hours, Shiba Inu has retreated sharply, dropping over 5% while the broader crypto market dipped around 0.8%. As one of the leading meme coins, this volatile swing highlights both the risks and characteristics unique to speculative digital assets. However, the recent price movement isn’t just about market-wide selloffs—several token-specific issues are weighing heavily on investor sentiment.

Market Conditions Amplifying Volatility

Risk-on sentiment has taken a backseat lately, with bearish momentum now controlling the narrative across digital assets. Meme coins like Shiba Inu typically amplify these broader trends due to their high-volatility nature. When the market turns risk-off, tokens positioned at the speculative end of the spectrum often face the most severe drawdowns. While such intraday swings aren’t unusual for holders of Shiba Inu, the combination of macro headwinds and token-specific challenges is creating additional pressure.

The Persistent Supply Problem Revisited

With 589.4 trillion tokens in circulation, Shiba Inu has long grappled with an oversupply issue. This massive token base creates ongoing inflationary dynamics—as more tokens exist in the ecosystem, the network’s total value is distributed across a larger pool, diluting individual token holders’ stakes.

To combat this, the Shiba Inu development team has implemented token burn mechanisms aimed at reducing the circulating supply. Over time, more than 400 trillion tokens have been permanently removed from circulation through burns, which many saw as a promising path toward price appreciation.

The Burn Halt That Nobody Wants to See

Here’s where things get concerning: recent data shows that Shiba Inu’s burn rate hit zero over the past day. This pause in the burn program contradicts the momentum investors hoped would continue, raising questions about whether the deflationary pressure that supporters relied on will materialize consistently.

Combined with rising liquidation activity and the market’s increasingly bearish tone, Shiba Inu’s near-term technical and fundamental outlook has darkened considerably. For investors holding this meme coin, the convergence of these factors—macroeconomic headwinds, supply-side concerns, and stalled burn initiatives—presents a challenging environment that requires careful monitoring.