Shiba Inu (SHIB) Faces Bearish Pressure as Whales Reduce Trading Activity and Sell Orders Outweigh Demand

Shiba Inu (SHIB) Faces Bearish Pressure as Whales Reduce Trading Activity and Sell Orders Outweigh Demand

Crypto News – Shiba Inu (SHIB) has experienced a slowdown in price momentum this week, as the bullish surge failed to breach the $0.000009 resistance level. On-chain analysis now sheds light on crucial data points that could play a pivotal role in determining the future price action of SHIB.

During this week, Shiba Inu‘s price entered a consolidation phase, with bullish momentum showing signs of weakening. The big question now is whether the second-largest memecoin by market capitalization will break down or stage a rebound from its current position.

Crypto Whales Holding SHIB Reduce Trading Activity

SHIB’s price witnessed double-digit gains when the Bitcoin (BTC) market rally spilled over into the memecoin markets in the final week of October. However, on-chain data analysis reveals that significant crypto whales have scaled back their trading activities since Shiba Inu rejected the $0.000008 mark on October 24.

According to data from IntoTheBlock, Shiba Inu’s whales conducted a record high of 69 large transactions on October 24. However, by November 2, this number had gradually decreased to 39 whale transactions, marking a significant 44% decline.

The metric for daily transactions measures the aggregate number of trades exceeding $100,000 in value. Historically, a substantial decline in whale transactions, as seen recently, is often viewed as a bearish signal. Such a decrease indicates a growing lack of interest among major institutional investors. Importantly, this could also influence strategic retail traders to adopt a negative outlook. If this trend persists, it may result in decreased market demand for the SHIB token in the days ahead.

SHIB Sell Orders Surpass Current Market Demand

Another critical on-chain indicator is the Aggregate Order Books, which currently highlights a diminishing demand in SHIB’s spot markets. As shown below, SHIB traders have actively placed sell orders for a total of 6.5 trillion tokens. What’s concerning is that this number significantly surpasses the 6 trillion SHIB buy orders currently listed across ten crypto exchanges.

The Aggregate Order Books of exchanges provide a snapshot of the total active market orders for an asset. Logically, when demand wanes, many sellers may be compelled to lower their prices in order to compete.

Consequently, the reduction in trading activity among whales and the weakening market demand may combine to trigger a downward price movement for SHIB in the coming days. Based on the current on-chain statistics, Shiba Inu could potentially experience a further price decline towards $0.000006.

The Global In/Out of the Money (GIOM) chart, depicting the entry price distribution of current SHIB holders, also reinforces this bearish narrative. It illustrates that if Shiba Inu loses critical support at $0.00007, larger losses could be catalyzed.

As shown below, 52,9200 addresses acquired 19.37 trillion SHIB at a maximum price of $0.000007. Given that this forms the most substantial support cluster beneath current price levels, these investors are likely to make strenuous efforts to “HODL” (Hold On for Dear Life).

However, if the demand from whales continues to decrease, Shiba Inu’s price may potentially dip further, possibly reaching $0.000005.

On the flip side, bullish sentiment could defy this bearish outlook if Shiba Inu’s price manages to reclaim $0.00001. But this currently appears to be a challenging prospect, as 153,700 addresses are holding 68.5 trillion SHIB acquired at an average price of $0.000008. Should they opt to take profits early, SHIB’s price could likely see a retracement.

Nonetheless, if that resistance level is breached, Shiba Inu’s price might rally towards the $0.00001 range.