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Shiba Inu (SHIB), has been moving much slower in the depths of the cryptocurrency space mainly because whales have been selling and overall market cap has been declining. Selling from these wallets has increased especially from wallets with $1 million to $10 million and this has affected the price of the token especially in the bearish market.
However, based on bearish trends, long-term holders, also known as Hodlers, haven’t relented from accumulating more Bitcoin and taking advantage of any dips occasioned by short-term traders.
Key Developments
Shiba Inu has also suffered a massive decline in its activity and the largest wallets were particularly displaying a 70% decline in inputs, which suggests that wallets have been abandoned. This was accompanied by a massive increase in holdings by investors in the $10-$100 million range during the day, which rose by 13% after dumping the $1-$10 million positions by 31% on the day.
Therefore, SHIB’s market liquidity actually declined, which led to its price dying at critical support levels. The situation was further compounded when the activity of the whales reduced their activity, resulting in the vulnerability of the token more often to market volatility.
However, fundamentals have been working in the favor of long-term investors denoted as Hodlers who have been holding more tokens at the time of low market conditions. This could mean that it is in a recovery phase, which depends on the support levels to hold on to the gains. At the time of writing, SHIB sits at $0.00001260, down by 4.02% in the last one day.
Overview of Shiba Inu Market
Shiba Inu’s market is experiencing a crossroads as it deals with a decline in whale activity and broader market uncertainty. However, long-term holders have shown remarkable resilience, continuing to accumulate tokens while short-term traders have scaled back. Meanwhile, the broader cryptocurrency market continues to face challenges, making the next few months crucial for SHIB’s future price movements.
Whale Abandonment and Market Impact
The reduction in large holder activity is one of the key factors behind Shiba Inu’s current market struggles. These whales, traditionally seen as major drivers of price fluctuations, have significantly decreased their positions, lowering SHIB’s liquidity. This has contributed to a price stuck in a bearish range below $0.000014. As whale activity slows, SHIB finds it harder to break out of its downward trajectory.
The Role of Hodlers in SHIB’s Stability
Interestingly, Shiba Inu’s long-term investors, or Hodlers, have proven to be resilient during the downturn. According to data from IntoTheBlock, these holders, who have owned their SHIB for over a year, have increased their cumulative balance to 786.24 trillion SHIB, setting a new all-time high. This class of investors has been actively accumulating more tokens, signaling confidence in a potential future rally.
Declining Activity from Short-Term Investors
In stark contrast to the accumulation trend seen among Hodlers, short-term investors, including Cruisers (holding 1-12 months) and Traders (holding for less than a month), have drastically reduced their SHIB holdings. Over the past week, Cruisers saw a 14.91% decrease in their balances, while Traders experienced an even steeper drop of 42.73%. This behavior is indicative of panic selling, as many investors seek to cut losses amid the ongoing downtrend.
Despite the bearish sentiment, there are signs that SHIB could rebound if key support levels hold. At the time of writing, SHIB’s price was hovering at the 0.000012688 mark, where there has been strong demand in the past. If this support level is maintained, SHIB could test higher price targets between $0.000030000 and $0.000045000.
The Impact of MACD Trends
The Moving Average Convergence Divergence (MACD) indicator continues to reflect bearish market conditions, with the signal line remaining below zero and histogram momentum falling. These signals suggest that SHIB is experiencing a declining bullish force, and an upward shift in price would likely require a bullish crossover pattern in the MACD.
Decreased Network Activity
Another concerning trend for Shiba Inu is the declining network activity. Active addresses decreased by 6.86%, while new address creation fell by 6.94%. These reductions suggest a cooling of interest in SHIB, making it more difficult for the token to gain momentum.
Interestingly, while many smaller traders have exited, large whales holding between 10 trillion and 100 trillion SHIB have been steadily increasing their positions. Since the downtrend began on January 31, these whales have added 3.75 trillion SHIB to their holdings, bringing their total to 164.4 trillion SHIB. This accumulation by large holders could signal that they are preparing for a future rebound when market conditions improve.
Price Performance vs. Burn Rate
Despite a 21.12%% surge in SHIB’s daily burn rate, the increased burning activity has not led to significant changes in price performance. This discrepancy highlights that on-chain metrics, such as burning, do not always correlate directly with price movements, especially in periods of broader market instability.
Conclusion
Shiba Inu is in a bear phase with a low whale engagement rate and relatively low supply in the market. Despite this, the fact that long-term holders still hold SHIB, together with continued accumulation by large whales, makes one believe that SHIB may be geared for a market reversal. The future of the SHIB market in the next stage will highly depend on one’s standpoints of support levels and the potential of attracting new investors to the token in the following market circumstances. Shiba Inu will remain unpredictable, given the nature of most cryptocurrencies, but the decision-making of long-term investors will dramatically contribute to the outcome.
Frequently Asked Questions (FAQs)
1- What caused Shiba Inu’s price drop?
Shiba Inu’s price dropped due to a 70% reduction in whale activity and a decline in market liquidity.
2- How have long-term holders reacted to market downturns?
Long-term holders have remained resilient, increasing their SHIB holdings despite the market downturn.
3- What is the impact of whale activity on SHIB’s price?
The reduction in whale activity has lowered SHIB’s liquidity, causing its price to remain stuck in a bearish range.
4- Can Shiba Inu recover from its current market condition?
Shiba Inu’s recovery depends on whether key support levels hold and new investors enter the market.
Appendix Glossary of Key Terms
Whale: An investor or entity that holds a large amount of cryptocurrency, significantly influencing the market.
Hodler: Long-term investors who hold onto their assets despite market volatility, often with the belief in future gains.
Liquidity: The ease with which an asset, like SHIB, can be bought or sold without affecting its price significantly.
MACD: A technical analysis tool used to identify price trends and momentum shifts in the market.
Burn Rate: The rate at which tokens are permanently removed from circulation to reduce supply and potentially increase scarcity.
Support Levels: Price levels at which an asset tends to find buying interest, preventing further price decline.
Cruisers: Investors who hold their assets for a period of 1 to 12 months, typically responding to market trends.
References
AMB Crypto – ambcrypto.com
The Crypto Basic – thecryptobasic.com
CoinMarketCap – coinmarketcap.com
TradingView – tradingview.com
IntoTheBlock – intotheblock.com
Shib Burn – Shibburn.com
