- Rising exchange reserves signal potential sell-off for Shiba Inu.
- SHIB struggles at key resistance, facing significant technical challenges ahead.
- Low bullish volume and rising reserves raise concerns for SHIB.
Shiba Inu (SHIB) has experienced a brief resurgence over the past week, but the latest market and on-chain data suggest that the bullish momentum might soon slow down. According to CryptoQuant, a substantial 284 billion SHIB tokens have moved between exchanges in the last 24 hours.
This surge in token movement indicates that holders could be preparing to sell, a potentially bearish signal for the cryptocurrency.
Exchange Reserves on the Rise
An essential factor contributing to the cautious outlook is the increase in exchange reserves. In past market cycles, rising exchange reserves have often been a precursor to sell-offs, signaling that traders are moving their tokens to exchanges in preparation for sales.
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This influx of SHIB into exchanges contrasts with the usual pattern of accumulation seen in bullish trends, where tokens move off exchanges to wallets in anticipation of long-term growth. As SHIB’s price hovers near key resistance levels, the growing exchange reserves are raising concerns that the current rally may face headwinds.
Testing the Long-Term Trendline
From a technical perspective, SHIB is encountering significant resistance in the $0.000012-$0.000013 range. This area is crucial as it aligns with the 50-day and 200-day Exponential Moving Averages (EMAs), which have historically acted as strong barriers against price increases.
Source: Tradingview
Moreover, the long-standing descending trendline that has contained SHIB’s price since mid-2023 is once again proving to be a challenging hurdle. The coin’s failure to break through this resistance zone suggests that a more substantial breakout may require a change in market conditions.
Volume Profile and Market Sentiment
Another sign of diminishing bullish conviction is the volume profile. SHIB saw a brief upward spike, but the volume of follow-through buying has been relatively low. This indicates that while some traders may be hopeful for a breakout, the broader market sentiment remains uncertain.
The discrepancy between low bullish volume and rising exchange reserves suggests that larger traders and whales may be positioning themselves to capitalize on any short-term gains, potentially leaving retail investors caught off guard.
A Possible Retest of Support Levels
Should selling pressure intensify, SHIB could experience a sharp correction toward the $0.000011 support zone, erasing a significant portion of the recent gains. However, a confirmed break above $0.0000136 with diminishing exchange reserves might rekindle optimism for a sustainable rally.
The market remains in a state of flux, with liquidity returning to exchanges, signaling caution for traders. The next few days will be critical in determining whether SHIB’s bull run can continue or if it will fade into a bear market phase.
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