Is SHIB worth investing in?

In the cryptocurrency market, Shiba Inu (SHIB), as a well-known representative of MEME coins, has always been a focal point of controversy regarding its price volatility and investment potential. As of May 2025, SHIB experienced a 7.4% decline within a week, yet it continues to attract the attention of both institutional investors and retail investors. This article will analyze SHIB's investment value from multiple perspectives, including fundamentals, technical aspects, and market sentiment, and provide strategic advice for investors.

Recent Performance and Market Trends of SHIB

Price Fluctuation and Institutional Accumulation

From April to early May 2025, the price of SHIB fell from a peak of $0.00001375 to $0.00001274, a decline of 7.4%, mainly influenced by overall market downward pressure and macroeconomic uncertainties. However, on-chain data shows that institutional investors continued to increase their holdings during this period, with 109 new "whale wallets" holding at least $1 million in SHIB added in April, bringing the total to 860. This phenomenon indicates that despite short-term price pressure, long-term confidence is still accumulating.

Technical Progress of Shibarium

The Layer-2 network Shibarium of the SHIB ecosystem continues to optimize, focusing on enhancing transaction throughput and validator participation. This technological upgrade aims to address network congestion issues and promote the development of decentralized applications (DApps). Furthermore, collaboration with Chainlink further strengthens its cross-chain interoperability, laying the foundation for future ecosystem expansion.

The Potential Upside Momentum of SHIB

has a high correlation with Bitcoin

The price correlation coefficient between SHIB and Bitcoin has reached 0.82. If Bitcoin breaks $100,000 in Q2 2025, SHIB may benefit accordingly. Historical data shows that during Bitcoin's upward cycles, MEME coins often see larger gains. For example, from the end of 2024 to the beginning of 2025, SHIB rose by 157% driven by Bitcoin.

Burning Mechanism and Deflation Expectations

The SHIB community reduces circulation by burning tokens, with a single-day burn rate in April soaring by 690%, destroying over 32.3 million tokens. Although the current burn rate has a limited impact on price, sustained large-scale destruction in the long term could potentially boost the coin's price through a deflationary effect.

Market Sentiment and Speculative Demand

The explosion of MEME coins usually occurs in the later stages of a bull market. Currently, the open interest in SHIB futures has doubled to $190 million in April, indicating the enthusiasm of leveraged traders. If Bitcoin leads a new bull market, SHIB may replicate the short-term surge seen in 2021.

Major Risks Facing SHIB

insufficient fundamental competitiveness

Despite the project team frequently introducing new concepts (such as the metaverse and the exchange ShibaSwap), the actual ecological data is weak. The total value locked (TVL) in ShibaSwap is only $20 million, far lower than mainstream DApps, and user activity is relatively low. Holding data shows that 77% of SHIB is concentrated in whale addresses, and 75% of holders are in a loss position, reflecting a lack of new capital inflow into the ecosystem.

Technical Formations and Market Pressures

From a technical perspective, SHIB has recently formed key support around $0.0000127, but the resistance level above at $0.0000129 has yet to be broken. If the support is breached, it may further dip to $0.000005. Additionally, the monthly chart of SHIB shows consecutive long upper shadows, indicating insufficient rebound momentum, and caution should be taken regarding downward risks.

excessive reliance on market speculation

The essence of SHIB remains a MEME coin, with its price highly dependent on market sentiment rather than actual applications. For example, in April 2025, an emerging project Ruvi AI (RUVI) attracted funding through a technological narrative, while SHIB showed lackluster performance during the same period due to a lack of breakthrough developments. If market trends shift, SHIB may face pressure from capital outflows.

Investment Strategies and Recommendations

• Day trading: Focus on the support level of $0.0000127 and the resistance level of $0.0000144, combined with the RSI oversold signal (currently 35.02) to capture rebound opportunities.
• Long-term Holding: If SHIB breaks through 0.00003 USD and stabilizes, it may initiate a mid-term upward trend, with a target towards 0.00004 USD.

Given the high volatility of SHIB, it is recommended that users control their positions within 10%-20% and avoid leverage trading. At the same time, one should pay attention to ecological developments (such as the Shibarium upgrade) and Bitcoin trends as signals for buying or stopping losses. Some analysts believe that if Bitcoin breaks through $100,000 in Q2 2025, SHIB may rise by 182% to $0.00004, returning to its 2021 high. However, there are also voices pointing out that SHIB needs to break through fundamental bottlenecks (such as the implementation of ecological applications) to escape the cyclical predicament of MEME coins.

Future Outlook for SHIB

As a representative of MEME coins, SHIB presents both investment opportunities and risks. Short-term speculators can profit from technical fluctuations, while long-term investors need to closely monitor ecological progress and market cycles. In the face of the drastic volatility of cryptocurrencies, diversification and strict risk management remain prudent strategies.

Author: Icing, Gate.io researcher *This article only represents the author's views and does not constitute any trading advice. Investment carries risks, and users should make cautious decisions. *The content of this article is original and the copyright belongs to Gate.io. If reprinted, please indicate the author and source; otherwise, legal responsibility will be pursued.