What happened
Today, popular dog-themed cryptocurrency Shiba Inu (SHIB 0.04%) saw declines of 9.2% as of 1:15 p.m. ET, over the past 24 hours. This decline greatly outpaced the broader move seen in the crypto market, which has sunk 6.5% since yesterday.
Yet another significant near-double-digit daily decline has now brought Shiba Inu more than 60% below its all-time high.
In October, Shiba Inu was within spitting distance of "killing a[nother] zero," moving toward $0.0001 per token. However, since hitting a high of $0.00008845, Shiba Inu has declined to $0.000034 at the time of writing.
Image source: Getty Images.
So what
Increasingly bearish sentiment appears to be forming among both bulls and bears in the crypto space with regard to meme tokens right now. A variety of recent significant declines among meme tokens has investors considering the downside potential of even the most sought-after meme tokens such as Shiba Inu.
As pointed out by fellow Fool contributor Sean Williams today, there's real, significant downside risk with Shiba Inu. The rhetoric among Shiba Inu bulls continues to focus on key catalysts such as ShibaSwap, a large recent token burn, a growing Shiba Inu community, and the potential for Shiba Inu-linked blockchain gaming. However, given the historical returns of assets that have risen as quickly as Shiba Inu has, the writing could be on the wall right now.
A high correlation between the search interest of key meme tokens and the token price of these underlying cryptocurrencies may create reason for pause among investors. Should the hype train continue to slow down, it's entirely possible that Shiba Inu's downward trajectory could not only continue, but speed up from here.
Now what
It should be noted that Shiba Inu has surged, and subsequently plummeted, on more than one occasion in this token's short life. This token's earlier surge in May was followed by a decline of more than 80% from its peak in less than a month. However, as we saw in October, this meme token once again was brought back to life, via surging retail investor interest.
Whether we're due for another 80% dip before an eventual rip, or continued selling pressure, remains to be seen. That said, one thing seems a certainty with this token: We're due for more volatility. Thus, aggressive investors looking to add some risk to their portfolios with Shiba Inu may want to strap in for what could be a bumpy ride.
