Shiba Inu (SHIB) recently witnessed an astonishing influx of 100 billion tokens, but the excitement is overshadowed by the fact that these gains are accumulating within exchange reserves instead of investors’ wallets.
SHIB Tokens Piling Up in Exchanges
According to CryptoQuant, the reserves of SHIB tokens held on exchanges have surged significantly, now nearing an impressive 85.1 trillion tokens. This scenario is often seen as bearish, as it indicates that more tokens are being readied for potential sale rather than being held or staked for the long term.
The SHIB token’s price activity does not align with this trend. Despite a minor recovery earlier in October, Shiba Inu remains confined within a long-standing descending triangle pattern. The token struggles to surpass critical resistance levels, notably the upper trendline of the triangle and the 100-day EMA, highlighting a lack of bullish momentum.
Exchange Reserves and Market Implications
The growing exchange reserves suggest increased selling pressure, as evidenced by the token’s failure to break past the 100 EMA. The declining trading volume further signals waning speculative interest in the market.
Currently, Shiba Inu is tethered around the $0.0000127 mark, failing to breach the $0.0000135 level. This entrapment in a bearish structure raises the likelihood of further declines. If these tokens begin flooding the market, SHIB could be pushed towards the lower support level near $0.0000120 or even lower.
What SHIB Needs for a Reversal
For Shiba Inu to reverse its fortunes, a significant reduction in exchange reserves is crucial, signaling investor accumulation. Additionally, a decisive breakout above the 100 EMA and the descending resistance line is necessary to shift market sentiment.
Despite the increasing supply of SHIB tokens, the current trend does not bode well for a long-term recovery. Unless this dynamic changes rapidly, the rise in exchange-held supply is likely to continue applying downward pressure on the price of Shiba Inu.
In summary, while the volume of SHIB tokens is on the rise, their accumulation in exchanges rather than in the hands of investors suggests a potentially challenging road ahead for the token.
