Shiba Inu [SHIB], the popular memecoin, finds itself navigating a period of bearish pressure as it trades within a two-month-old range. Recent price action indicates that sellers are gaining the upper hand, particularly after SHIB breached the mid-range level of $0.0000129. This failure to maintain this crucial support level increases the likelihood of the price descending towards the lower boundary of its current trading range. Adding to the downward momentum, a recent report highlighted significant sell-offs by some large holders, commonly known as whales.
On-Chain Metrics Paint a Mixed Picture for SHIB
An analysis of Shiba Inu’s on-chain metrics presents a somewhat conflicting narrative. Despite reports of whale selling, the exchange net position change has remained negative since January. This suggests that a greater number of SHIB tokens are being moved off exchanges, typically interpreted as a sign of reduced immediate selling pressure and potential accumulation. This contrasts with the high coin inflows observed in December, which coincided with the peak of a previous rally. However, other indicators point towards weakening bullish sentiment. Funding rates on Santiment have dipped below zero, signaling an increase in bearish bets, while Open Interest has declined since April 26th, indicating a decrease in bullish conviction.
Market Sentiment and Holder Behavior Analyzed
While active addresses saw a temporary spike in early May, this surge in activity has since subsided. Sustained high activity often signals strong demand, whereas sporadic increases are more likely linked to selling events. Interestingly, when considered alongside the exchange outflows, these activity spikes could point towards accumulation by certain holders. Furthermore, the mean coin age, which reflects the average time tokens have been held, has not shown a strong upward trend in the past month, unlike the accumulation phase observed between January and March.
Dormant circulation, which tracks the movement of previously inactive tokens, has shown minor peaks, suggesting small waves of on-chain selling. The 30-day Market Value to Realized Value (MVRV) ratio has also dipped back into negative territory, potentially indicating that selling pressure from short-term holders may be nearing exhaustion, which could allow for a period of consolidation and accumulation for the memecoin.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Shiba Inu Burn Rate Soars 300% as Over 327 Million SHIB Removed
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