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Is a 75% Crash Next?

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SHIB Burn Rate


Further decline or a revival: what’s next for the self-proclaimed Dogecoin killer?

The situation for the second-largest meme coin has worsened recently, following a double-digit slide over the past 14 days.

Some worrying factors suggest Shiba Inu (SHIB) could experience a further collapse in the near future, while one popular analyst predicted it might crash to a five-year low.

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The Free Fall is Yet to Happen?

While Shiba Inu enjoyed some notable surges last year, 2026 has been nothing but painful. As of this writing, it trades at around $0.000005467 (per CoinGecko’s data), representing a whopping 60% plunge on a yearly scale.

Its market cap has tumbled to roughly $3.2 billion, further widening the gap with niche frontrunner Dogecoin (DOGE), which maintains a capitalization of more than $15 billion.

According to Ali Martinez, SHIB might be on the verge of a crash to as low as $0.00000138. This is not the first time the analyst has warned about such a scenario. Last month, he noted that the meme coin dropped below the important level of $0.00000667, claiming this could have opened the door to a meltdown to the aforementioned zone.

Shiba Inu’s burning mechanism also signals that a further pullback may be on the way. Over the past 24 hours, the burn rate has decreased by approximately 99% after only 20,176 SHIB were sent to a null address.

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SHIB Burn RateSHIB Burn Rate
SHIB Burn Rate, Source: shibburn.com

The program’s ultimate goal is to reduce the meme coin’s overall supply, potentially making it more valuable in time (assuming demand remains constant or heads north). It was adopted in 2022, and since then, the team and community have destroyed more than 410.7 trillion tokens, leaving 585.47 trillion in circulation.

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SHIB SupplySHIB Supply
SHIB Supply, Source: shibburn.com

The stalled progress of Shibarium is also a bearish factor. Shiba Inu’s layer-2 scaling solution saw the light of day in the summer of 2023 and aims to foster the project’s development by lowering transaction fees, improving speed, and enhancing scalability. It suffered an exploit in September last year, which shook investor trust and caused widespread damage across the Shiba Inu ecosystem. Prior to the incident, daily transactions processed on Shibarium were in the millions, while after that, they plummeted to mere thousands.

Shibarium TransactionsShibarium Transactions
Shibarium Transactions, Source: shibariumscan.io

The Bullish Signals

Even as the meme coin struggles and the broader crypto market is under pressure, SHIB’s supply on centralized exchanges keeps shrinking. According to CryptoQuant’s data, those reserves fell below 81 trillion tokens, the lowest point since May 2021.

SHIB Exchange Reserves
SHIB Exchange Reserves, Source: CryptoQuant

The development could be interpreted as a positive sign because it suggests that investors are in no rush to move their holdings to such platforms: a move often seen as a pre-sale step.

Meanwhile, Shiba Inu’s Relative Strength Index (RSI) briefly plunged below 30, indicating the asset has entered oversold territory and could be due for a resurgence. The technical analysis tool runs from 0 to 100, and conversely, ratios above 70 suggest SHIB could be overbought and gearing up for a possible correction. As of this writing, the RSI stands at roughly 36, or much closer to the bullish zone.

SHIB RSISHIB RSI
SHIB RSI, Source: CryptoWaves
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Crypto World

Aave’s TVL Falls $8B After $293M Kelp DAO Hack

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Aave’s TVL Falls $8B After $293M Kelp DAO Hack

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after hackers behind the $293 million Kelp DAO exploit borrowed funds on Aave, leaving roughly $195 million in “bad debt” on the protocol and triggering withdrawals.

Data from DeFiLlama shows that Aave’s TVL fell from about $26.4 billion to $18.6 billion by Sunday, losing the top spot as the largest DeFi protocol. 

Aave v3’s lending pools for USDt (USDT) and USDC (USDC) are now at 100% utilization, meaning that more than $5.1 billion worth of stablecoins cannot be withdrawn until new liquidity arrives or borrows are repaid. 

$2,540 is available to be withdrawn from the $2.87 billion USDT pool on Aave v3 at the time of writing. Source: Aave

Aave’s TVL fall shows how rapidly risk from a single security incident can spread throughout the broader, interconnected DeFi lending market, potentially leading to a severe liquidity crisis.

The incident began on Saturday when hackers stole 116,500 Kelp DAO Restaked ETH (rsETH) tokens worth about $293 million from Kelp DAO’s LayerZero-powered bridge and used them as collateral on Aave v3 to borrow wrapped Ether (wETH).

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Crypto analytics platform Lookonchain said the move created about $195 million in “bad debt” on Aave, which contributed to the Aave (AAVE) token tanking nearly 20% from $112 on Saturday at 6:00 pm UTC to $89.5 about 25 hours later. 

Lookonchain noted that some of the largest crypto whales to withdraw funds from Aave were the MEXC crypto exchange and Abraxas Capital at $431 million and $392 million, respectively.

Source: Grvt

Several crypto networks and protocols tied to rsETH or the LayerZero bridge have paused use of the bridge until the problem is resolved, including DeFi platform Curve Finance, stablecoin issuer Ethena and BitGo’s Wrapped Bitcoin (WBTC).

Aave has frozen several rsETH, wETH markets

Shortly after the Kelp DAO exploit, Aave said it froze the rsETH markets on both Aave v3 and v4 to prevent any suspicious borrowing and later stated that rsETH on Ethereum mainnet remains fully backed by underlying assets.

WETH reserves also remain frozen on Ethereum, Arbitrum, Base, Mantle and Linea, Aave said.

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This incident marks the first significant stress test of Aave’s “Umbrella” security model, which was introduced in June 2025 to provide automated protection against protocol bad debt while enabling users to earn rewards.

Related: Aave DAO backs V4 mainnet plan in near-unanimous vote

Earlier this month, the Bank of Canada found that Aave avoided bad debt in its v3 market by using overcollateralization, automated liquidations and other strategies that shifted risk to borrowers.

In comments to Cointelegraph, Aave defended its liquidation-based model, framing it as a core safety mechanism that protects lenders while limiting downside for borrowers.

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It comes as Aave parted ways with its longest-standing DeFi risk service provider, Chaos Labs, on April 6, following disagreements over the direction of Aave v4 and budget constraints.

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?