On-chain data points to mounting selling pressure in the Shiba Inu market, as the supply of SHIB available on exchanges climbs to 86 trillion. This rising figure adds to the existing pressure on the asset, which has already been underperforming. Recent data underscores the continuation of a frail short-term outlook, with no solid ground for a sustainable price recovery yet in sight.
Spike in SHIB Transfers to Exchanges Amplifies Pressure
Notably, the average inflow of Shiba Inu to exchanges surged by 606% over a seven-day moving average. All indicators related to inflows to exchanges are in positive territory, signaling a significant token transfer by market participants. The subdued performance of Shiba Inu since early October has been compounded by increasing inflows, further accentuating the market pressure.
In the past 24 hours alone, the net inflow stood at a positive 42 billion SHIB, illustrating the ongoing shift of tokens onto exchanges and the prolonged nature of the selling pressure. A positive net flow points to a liquidity buildup caused by the influx of assets onto exchanges, which can exert downward pressure on prices.
“The recent net inflow of 42 billion SHIB suggests that eliminating market selling pressure in the short term could be challenging.”
Shiba Inu, known as a meme coin developed on the Ethereum network, closely monitors these on-chain movements, particularly transfers to centralized exchanges, due to their implications for short-term price movements.
Historical Patterns Reveal Market Sensitivity
Historically, a significant portion of Shiba Inu’s supply has been held on centralized exchanges. Every notable uptrend since 2023 has been followed by increases in exchange inflows and trading volumes, explaining the cautious interpretation of current data.
Although the supply on exchanges doesn’t necessarily translate into immediate sales, there’s a likelihood of these tokens changing hands over time, potentially prolonging price pressure during periods of weak demand.
Price and Momentum Indicators Remain Subdued
The technical outlook mirrors the on-chain data’s narrative. Since the start of October, the price of Shiba Inu has plummeted more than 28%. Flat trading volumes indicate persistent market pressure, while untested liquidity clusters suggest that downside risks haven’t fully dissipated.
Momentum indicators, particularly the Relative Strength Index (RSI), remain near the 30 mark, reflecting market oversold conditions but failing to signal a robust recovery on their own. Moreover, deteriorating general market sentiment and sector-wide security breaches further dampen risk appetite.
“The 86 trillion SHIB supply on exchanges, coupled with a 606% rise in inflows, underscores ongoing market fragility.”
