Shiba Inu’s downtrend may drag on for another 6-7 months – here’s the data behind it
Shiba Inu’s price action has been stuck in a grinding downtrend, and on-chain data suggests this phase could stretch out for another half-year or more. Despite occasional short-term rallies and brief spikes in interest, key profitability and valuation indicators show that SHIB remains deep in bear-market territory.
Memecoins are stuck, and SHIB is no exception
Among the leading memecoins by market capitalization, price performance over the past week has been largely stagnant. Shiba Inu (SHIB) and Pepe (PEPE) both traded within roughly 2% of their prices from a week earlier, signaling a lack of conviction from buyers.
While another popular memecoin (M) managed to climb about 10% in the same period and Dogecoin (DOGE) slipped by around 3.8%, Shiba Inu barely moved, posting a mild decline of about 0.51% week-on-week.
This muted behavior mirrors the broader crypto environment. Bitcoin’s recent sideways action and absence of strong momentum have filtered down into high-beta segments like memecoins, preventing them from mounting sustainable breakouts. What looks like simple boredom in the charts, however, conceals a much deeper structural problem for SHIB holders.
Why short-term bounces don’t change the big picture
Even if SHIB were to jump 10% or more over the coming week, it would likely remain a countertrend rally within a broader bearish structure. Long-term holder sentiment is currently anchored in pessimism, and historical on-chain patterns suggest that this negativity may not be close to a resolution.
Two crucial indicators back up this view:
– Percent supply in profit
– MVRV ratio and its deviation from the long-term mean
Together, they paint a picture of a market where the majority of participants are underwater and where previous bear-phase dynamics may still be playing out.
Percent supply in profit: almost everyone is losing
The percent supply in profit metric measures what share of the circulating SHIB supply is currently sitting at a profit relative to its acquisition price. At the time of measurement, this figure had collapsed to roughly 3.07%.
To put that into perspective:
– In October 2023, the percent of supply in profit fell to 3.93% – already the lowest level seen in recent years.
– In February 2026, it dropped even further to around 2.86%.
Current readings are hovering around the same depressed zone historically associated with deep bear markets. In other words, only a tiny fraction of SHIB holders are in the green, while the overwhelming majority are nursing losses.
Such severe unrealized losses usually coincide with extreme pessimism and investor fatigue. Holders either capitulate or simply disengage, limiting buy-side pressure and weakening the chances of a sustained recovery.
MVRV deviation signals extended undervaluation
Another key piece of the puzzle is the MVRV ratio (Market Value to Realized Value) and how far it has deviated from its long-term average. MVRV compares the market cap (based on current price) to the realized cap (based on the aggregate cost basis of all coins).
– An MVRV above 1 and significantly above the historical mean often points to overvaluation and heightened downside risk.
– An MVRV well below 1 and substantially under its long-term mean suggests undervaluation, capitulation, and bear-market stress.
During the 2022 bear market, SHIB’s MVRV spent an extended period between 0.5 and 1 standard deviation below its all-time mean. This represented an “extreme deviation” zone in which the asset traded at steep discounts relative to its aggregate cost basis.
Crucially, that extreme phase lasted from May 2022 until January 2023 – roughly eight months of persistent undervaluation. If the current MVRV pattern continues to echo that earlier period, Shiba Inu’s bear market could realistically drag on until around September 2026.
What “another 6-7 months of pain” actually means
The implication of this on-chain setup is not just “prices are low,” but “the market is structurally stuck in a bear phase.” Low profitability and extremely depressed MVRV readings point to:
– Exhausted buying power from existing holders
– A lack of new capital willing to aggressively accumulate
– Prolonged sideways-to-down price action, punctuated by short-lived spikes
In this sort of environment, even relatively positive headlines may fail to ignite a lasting rally.
Why bullish news might not be enough
There has been speculation that traditional finance products, such as a proposed ETF from a major asset manager that could include volatile assets like Shiba Inu, might eventually support demand. On paper, such developments look positive: they open the door for more institutional or retail participation via regulated vehicles.
However, the on-chain data suggests that sentiment and positioning are so heavily skewed to the downside that isolated news catalysts are unlikely to reverse the trend on their own. In a mature bull market, hype can sustain rallies. In a deep bear, hype tends to fade quickly as holders use every spike as an opportunity to exit.
Until profitability metrics and MVRV readings start to normalize, the market backdrop remains hostile to any enduring bullish narrative.
Technical picture: bounces as selling opportunities
From a higher timeframe technical perspective, SHIB’s price structure remains decisively bearish. Key features of this structure include:
– Lower highs and lower lows on daily and higher charts
– Failed attempts to break above previous swing highs
– Weak volume on rallies compared to sell-offs
In such a setup, any move back toward recent swing highs is more likely to attract sellers than spark a breakout. Traders focusing on trend-following strategies may view these rebounds as favorable points to open or add to short positions rather than to bet on a trend reversal.
What this means for different types of SHIB market participants
The same market conditions can imply very different strategies depending on a trader’s or investor’s profile:
– Short-term traders
– Volatility, even within a downtrend, can be profitable.
– Range trading and shorting bounces toward resistance may offer opportunities, provided risk is tightly managed.
– Long-term holders
– Deep unrealized losses and historically low profit metrics signal that patience will be tested.
– Averaging down carries substantial risk if the bear phase truly extends another 6-7 months or longer.
– New entrants
– On-chain capitulation signals often coincide with discounted prices, but timing the final bottom is notoriously difficult.
– A cautious approach might involve waiting for signs that MVRV and percent supply in profit are recovering, rather than falling further.
Risks of assuming “it can’t go much lower”
One of the biggest psychological traps in prolonged bear markets is the belief that an asset has “bottomed” purely because its holders have already suffered heavy losses. On-chain data for SHIB reveals that:
– Profitability can stay depressed for months, not days.
– MVRV can remain below the mean far longer than impatient traders expect.
– Prior cycles show that extreme undervaluation zones do not automatically equate to an imminent rebound.
For SHIB, the historical precedent from 2022-2023 suggests that the current undervalued regime may have considerable time left to run if the pattern repeats.
What to watch going forward
For anyone tracking Shiba Inu’s transition out of this bear phase, a few indicators stand out as particularly useful:
– Rising percent supply in profit
– A sustained move higher from the extremely low single-digit percentages would indicate that more holders are finally seeing green, often a prerequisite for healthier market structure.
– MVRV converging back toward its long-term mean
– An end to extreme negative deviations could signal that the most violent phase of the bear market is over.
– A shift in price structure
– The emergence of higher lows and a break above major swing highs, backed by strong volume, would suggest that demand is starting to overpower supply rather than the other way around.
Until such changes appear, the probability favors continued weakness or, at best, a choppy sideways grind within a broader downtrend.
Bottom line
Shiba Inu is currently caught in a classic bear-market trap, characterized by:
– Historically low profitability for holders
– MVRV readings deeply below the long-term average
– Pessimistic sentiment and limited fresh capital inflows
– Bearish higher timeframe price structure
If the past is any guide, the current phase could persist for another 6-7 months, potentially stretching the bear market into around September 2026. Short-term rallies can and likely will occur, but on-chain and technical evidence suggests they are more likely to be used for exit liquidity by weary holders than to mark the beginning of a new sustained uptrend.
For participants in the SHIB market, this environment demands clear risk management, realistic expectations, and a sober recognition that, for now, the data remains firmly on the side of the bears.