On-chain data reveals approximately 549 billion Shiba Inu (SHIB) tokens have been moved toward centralized exchanges, a development that typically signals holders are preparing to sell. This substantial inflow has placed the meme coin in a precarious position, raising significant concerns about its near-term stability and the potential for further downside pressure.
The technical structure for SHIB remains weak, reinforcing the bearish outlook. The asset is entrenched in a larger downward trend, characterized by a series of lower highs and lower lows. Moving averages are sloping downward and acting as dynamic resistance, stifling any sustained upward momentum. Recent attempts by buyers to stage a recovery have quickly stalled near local resistance levels, indicating that sellers continue to control the market's momentum.
The broader market context exacerbates the situation. Unlike during robust uptrends where aggressive buying can absorb large exchange inflows, SHIB is currently trading below key trend lines with apparent limited liquidity. This environment means that even modest selling pressure could lead to disproportionate price declines. The on-chain data, showing rising exchange reserves, suggests a market leaning toward supply increase and potential liquidation, rather than accumulation.
Traders are now closely watching to see if SHIB can establish a credible base and hold recent local support levels. The probability of another significant price drop increases sharply if exchange inflows continue to climb while the price struggles to recover. Despite a recent 5.34% price increase to around $0.00000632, the overall narrative remains dominated by expanding supply and weak demand. For a meaningful reversal, SHIB would require a powerful catalyst to shift the current market sentiment.
