This time Shiba Inu has garnered media attention due to a significant and highly erratic on-chain event rather than a price increase. The most recent data shows that in just seven days, the inflow of large holders has increased by more than 1,010%. When a spike like that occurs during a period of decline in SHIB’s price, it raises a number of concerns for market players.
According to the market chart, SHIB is still declining steadily; it is currently trading at about $0.00001167, having fallen more than 25% from its local peak in early May. With the asset currently trading below the 50, 100 and 200 EMA, all of the major moving averages, a bearish picture is painted. More significantly volume is decreasing, and momentum as measured by RSI is not showing any indications of strengthening.
SHIB/USDT Chart by TradingView
That alone restricts possible upside and puts pressure on the price. The real problem with this setup, though, is the on-chain data. There is a startling disconnect between price action and the 1,010.72% increase in inflows to large wallets. In the past, whale accumulation has usually occurred either in anticipation of a rally or to covertly get ready for distribution before further declines.
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The price continued to decline during this inflow spike, making the second scenario more plausible. If those transactions are internal transfers between whale-controlled addresses, we may be seeing a significant buildup for potential selling pressure. If accurate, this influx has the potential to further destabilize SHIB’s market.
Any coordinated withdrawal by significant holders could set off a chain reaction of panic-selling since there is little liquidity and low confidence. The only upside to this situation is that a short-term bounce might occur if these whales are purchasing in expectation of one.
However, depending on that result is risky given how poor the technicals are. The bottom line is that this type of spike in inflow is abnormal. The volatility storm that is SHIB may just be beginning, so traders should remain alert.
