Can Shiba Inu Price Recover After Recent 13% Drop?

Shiba Inu (SHIB) has had a challenging week, experiencing a 13% decline in value. Nevertheless, a subset of whales has expressed their faith in this prominent meme coin, gradually boosting their holdings over the last few weeks.

Conversely, short-term holders (STHs) have been liquidating their SHIB, contributing to the price’s downward pressure. This analysis delves into why the STHs’ selling actions might hinder any notable rally in the near future.

Shiba Inu Whales Clash with Short-Term Holders

BeinCrypto’s examination of Shiba Inu’s supply distribution reveals that a group of whale investors holding between 10,000 and 100,000 coins has increased their holdings in recent weeks.

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This large group of SHIB holders now possesses 3.06 billion SHIB, a 2% increase from the previous 3.01 billion held a month ago. Their choice to accumulate additional tokens may have been influenced by SHIB’s perceived undervaluation throughout September, as indicated by its market value to realized value (MVRV) ratio.

This metric shows that SHIB’s 30-day and 90-day MVRV ratios were predominantly negative for most of September, indicating that the coin was trading below its historical value, possibly motivating these whales to increase their coin quantities.

In contrast, SHIB’s STHs, those who have held their coins for under 30 days, have adopted a more cautious approach. Staying true to their “paper hands” reputation, they have been offloading their coins in recent weeks.

This selling activity is significant, as STHs typically prefer to minimize risk, disposing of their assets at the slightest indication of difficulty. Considering they control a substantial portion of SHIB’s circulating supply, their selling trends exert considerable downward pressure on the price of the coin.

SHIB Price Outlook: The Coin Targets $0.000010

SHIB’s declining on-balance volume (OBV) highlights the selling actions from SHIB’s STHs. Currently sitting at 24.79 trillion, the meme coin’s OBV, which assesses buying and selling pressure based on trading volume, has exhibited a downward trend since the start of the month.

A falling OBV is generally seen as a bearish sign, indicating possible downward price fluctuations. This trend, paired with a price decrease, suggests a lack of support from buyers. If demand for SHIB continues to fall, it could revisit its low of $0.000010 hit on August 5.

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If STHs shift their sentiment to bullish and start accumulating, it may propel Shiba Inu’s price upward by 69% to test the resistance level at $0.000028.