Shiba Inu (SHIB) is currently trading lower, continuing a downward trend from the previous session. The meme-inspired cryptocurrency is encountering resistance near a key technical indicator and faces increasing selling pressure from major holders. Current data indicates a notable decrease in the percentage of circulating supply held in profit, contributing to a cautious short-term outlook.
Increased Whale Selling and Reduced Profitability
Data from on-chain analytics providers reveal that large SHIB holders have been reducing their exposures. Whale wallets holding between 10 million and 100 million tokens have collectively decreased their holdings by billions of SHIB since the start of the year. Similarly, an even larger cohort of holders, those controlling 100 million to 1 billion SHIB, has also been actively distributing tokens.
This selling activity from influential market participants often signals a shift in sentiment and can act as a headwind for price appreciation. Concurrently, the overall profitability of the SHIB supply has seen a dramatic decline. Whereas a significant majority of tokens were in profit at the beginning of the year, that figure has now fallen substantially, indicating that most current holders are at a loss. This can create underlying selling pressure as investors look to exit breakeven positions.
Derivatives Market Reflects Growing Pessimism
The sentiment shift is also evident in the SHIB derivatives markets. Open Interest, which represents the total value of outstanding futures contracts, has declined. This typically indicates capital is flowing out of the market, often following a period of liquidations or as traders close positions to realize profits or losses.
Recent liquidation data shows a sharp increase in long positions being forcibly closed compared to short positions. This has resulted in a long/short ratio that now leans bearish, meaning more traders are betting on the price going down than up. Despite this, the funding rate remains positive, suggesting some leveraged bulls are still active and paying fees to maintain their positions in hopes of a rebound.
Technical Analysis Points to Potential Downside
From a technical perspective, SHIB's price action has formed a pattern of lower highs and is struggling to overcome a key moving average. The recent rejection at this level has reinforced the near-term bearish bias.
Key support levels to watch are found at recent swing lows. A break below these could open the path for a test of significantly lower prices that were last seen months ago. Traders might consider these levels as potential profit targets for short positions or as areas where the price could find new footing.
Momentum indicators are providing mixed signals. One key oscillator has failed to cross into bullish territory and is turning lower again, suggesting buying pressure is waning. Another momentum indicator remains flat and neutral, reflecting overall market uncertainty. Both indicate there is room for the price to move lower before reaching oversold conditions.
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Conversely, for a bearish thesis to be invalidated, buyers would need to push the price above a recent significant high. A decisive break above this level could signal a shift in momentum and open the door for a rally toward higher resistance zones.
Frequently Asked Questions
What does 'supply in profit' mean for Shiba Inu?
'Supply in profit' refers to the percentage of the total circulating SHIB tokens that are currently worth more than the price at which they were last moved. A low percentage suggests most holders are underwater, which can increase selling pressure at key resistance levels as people try to break even.
How does whale activity influence SHIB's price?
Large holders, or "whales," can significantly impact price due to the size of their transactions. When whales begin selling, it can flood the market with supply, often pushing the price down. Their actions are closely watched as a barometer of sentiment among wealthy, informed investors.
What is Open Interest and why is its decline important?
Open Interest is the total value of all active futures contracts. A decline suggests traders are closing their positions and may be losing interest in the asset. It often coincides with decreased volatility and can signal that a current trend is losing momentum.
What key support level are traders watching?
Analysts are closely monitoring a previous support level that was tested in early June. A break below this could trigger further selling, with the next major support zone sitting significantly lower, around a price last seen in March.
Could the SHIB price still recover?
Yes, a recovery is possible if buying pressure returns. This would likely require a broader market rally or positive SHIB-specific news. A key resistance level that must be broken for a bullish outlook to gain traction is the peak from late March.
What is a long/short ratio?
The long/short ratio measures the number of traders holding long positions (betting the price will rise) versus those holding short positions (betting the price will fall). A ratio below 1, as currently seen, indicates there are more short traders, reflecting a bearish market sentiment.