Shiba Inu Falls as Rate Cuts and Trade Tensions Shake Crypto Market

The hype around meme coins is cooling fast this week as macroeconomic and geopolitical tensions rattle investor confidence. Shiba Inu, one of the most traded digital tokens, has slumped sharply, reflecting a broader selloff across the crypto market.

Shiba Inu Price Drops Amid Market Jitters

Shiba Inu (SHIB) fell 7.3% in the past 24 hours as of 6:20 p.m. ET Thursday, marking one of its steepest one-day declines in weeks. The drop outpaced Bitcoin’s 3.4% and Ethereum’s 4.5% losses, signaling that risk appetite for speculative assets is fading fast.

The selloff comes after the U.S. Federal Reserve’s latest decision on interest rates disappointed traders who had been betting on more aggressive monetary easing. The Fed’s Federal Open Market Committee cut the benchmark rate by a modest quarter point, a move that investors say had already been priced into markets.

Cryptocurrencies generally perform better when borrowing costs are low, as cheap capital fuels speculative trading. But with Fed Chair Jerome Powell signaling uncertainty about further rate cuts in December, investors are now recalibrating their expectations.

Rate Cut Optimism Turns to Doubt

Markets had been anticipating a more dovish stance from the Fed, with some analysts expecting a half-point cut to counter slowing economic growth. The smaller move and Powell’s cautious remarks dampened hopes for an extended easing cycle.

“Traders wanted clear confirmation that the Fed would keep cutting, but Powell didn’t give them that,” said one market analyst familiar with the matter. “That hesitation immediately hit risk assets, and crypto was the first to react.”

In simple terms, higher interest rates reduce liquidity and make borrowing costlier, pressuring both equities and digital assets. Shiba Inu’s sharp fall reflects its sensitivity to investor sentiment and global liquidity trends.

Data compiled from central bank announcements and market price records.

U.S.-China Trade Deal Adds More Uncertainty

Geopolitical news also weighed on sentiment. President Donald Trump’s meeting with Chinese President Xi Jinping in South Korea produced a limited trade agreement that avoided new tariffs but stopped short of resolving deeper tensions.

The pact temporarily paused China’s planned restrictions on rare-earth mineral exports and offered minor tariff relief for U.S. agriculture, but investors saw the deal as a temporary fix rather than a breakthrough.

Cryptocurrency markets, often sensitive to global political developments, reacted negatively. Traders fear renewed trade friction could slow economic recovery and reduce risk appetite. “It looks like a ceasefire, not a peace treaty,” said a senior economist at a Tokyo-based investment firm.

Investor Shift Away from Meme Coins

Beyond macro factors, the selloff also highlights a broader shift away from highly speculative meme coins. Tokens like Shiba Inu and Dogecoin, once seen as fun and fast-moving assets, are now facing the realities of tighter monetary policy and reduced retail enthusiasm.

On-chain data shows that Shiba Inu’s trading volume fell 18% over the past week, and large wallet addresses (so-called “whales”) have reduced their holdings, according to blockchain analytics firm Nansen. This suggests that both retail and institutional investors are trimming exposure.

Key reasons behind the selloff include:

• Reduced expectations for rapid rate cuts in the U.S.

• Growing investor caution following the U.S.-China trade update.

• Rotation toward more stable digital assets and cash positions.

What Could Come Next for Shiba Inu

Analysts say Shiba Inu’s short-term outlook depends on how global markets digest economic data in the coming weeks. If inflation continues to cool, the Fed may consider another rate cut in December, which could provide relief for cryptocurrencies.

However, if economic uncertainty deepens or global trade tensions escalate, meme coins could remain under pressure. Technical analysts note that SHIB faces key support around $0.000017, and a break below that level could trigger further downside.

Despite its current struggles, Shiba Inu remains one of the most recognizable names in the crypto world, with a market capitalization near $6 billion. Its large and loyal community continues to support the project’s ecosystem developments, including layer-2 scaling solution Shibarium.

Still, traders are urged to remain cautious. “Volatility is back, and this is not the time to chase every dip,” warned a crypto strategist based in New York. “Until the macro picture clears up, risk management is everything.”

Global Factors Weigh Heavily on Crypto

Thursday’s selloff underscores how digital assets have become tightly linked to global financial and political developments. Unlike earlier years when meme coins traded largely on social media hype, they now respond quickly to central bank policy and diplomatic headlines.

This shift reflects a maturing crypto market, but it also means prices are more exposed to the same forces that move traditional markets. With both interest rate uncertainty and geopolitical risk rising, investors are treading carefully.

In the end, Shiba Inu’s fate will likely depend less on memes and more on macroeconomics.

The coming weeks will test whether this correction is a short pause or the start of a deeper trend. What do you think? Is Shiba Inu’s latest slide just a reaction to global news, or a sign that the meme coin era is losing steam? Share your thoughts on social media and join the discussion.