As the cryptocurrency market sees an upward trend, Shiba Inu (SHIB) is attempting to break free from its bearish phase. However, mixed signals from on-chain data in the memecoin sector may influence its price movements. This article delves into the current dynamics affecting SHIB and what market participants can expect in the near future.
Why Are Large Holders Reducing Assets?
Shiba Inu’s price trajectory is diverging from that of major wallet holders, who have significantly reduced their holdings. At the start of the month, there was a 27% drop in large addresses holding between $100,000 and $10 million worth of SHIB. The ongoing price decline has led whale investors to divest their assets.
The expected surge in the Ethereum ecosystem did not materialize after the launch of Ethereum ETF funds. This has contributed to significant selling pressure on SHIB, weakening its market performance.
How Does Bitcoin Influence Shiba Inu?
Bitcoin’s influence on Shiba Inu is currently substantial. SHIB’s correlation with Bitcoin, which turned positive from negative in early August, now stands at 0.86. Such a strong correlation suggests that SHIB is likely to mirror Bitcoin’s movements. As Bitcoin experiences a gradual recovery, there is potential for SHIB to follow suit.
Despite this, the memecoin’s price may not rise immediately due to conflicting signals from various indicators, potentially keeping SHIB below the $0.00001473 resistance level.
Actionable Insights for Investors
Key Considerations:
- Monitor Bitcoin’s performance closely as SHIB’s price is highly correlated.
- Watch for changes in large wallet holdings as an early indicator of market sentiment.
- Pay attention to Ethereum ecosystem developments for indirect impacts on SHIB.
- Stay alert for any break above the $0.00001473 resistance, which could signal a bullish trend.
If the current sideways movement persists, SHIB may still have a chance to break the downtrend line, potentially restoring some investor confidence. A breach of the resistance could push SHIB to higher levels, invalidating the bearish outlook and potentially taking it to the $0.00002000 range.