Shiba Inu Sell-Offs Incoming: 82 Trillion Deposits Threaten To Crash SHIB Price

Shiba Inu is facing increased selling pressure as significant volumes of tokens are deposited onto exchanges. On-chain data from platforms like CryptoQuant show the SHIB exchange reserve reaching 82 trillion coins, a level that has risen from the start of the year. This has led to concerns that the SHIB price may experience a decline amid growing exchange inflows.

The positive exchange netflow indicates that more SHIB is being deposited into exchanges than removed. This trend is often associated with short-term selling pressure, as assets on trading platforms are typically more liquid and available for offloading. The netflow turned positive around the same time SHIB reached a yearly high, which has led some analysts to question the sustainability of the rally.

Despite the bearish on-chain indicators, whale activity provides a potential counterpoint. Santiment data reveals an 111% spike in whale transactions, suggesting that larger holders remain bullish on the SHIB price. This development is notable as it places SHIB among tokens with a market cap above $500 million that have seen similar increases in whale activity.

Why Is SHIB Facing Increased Selling Pressure?

The increase in SHIB exchange reserves has been a consistent trend, rising from around 81 trillion at the start of the year to 82 trillion currently. This growth suggests that holders are preparing liquidity for potential sales, a behavior often linked with bearish price action. In the last 24 hours alone, approximately 324 billion SHIB tokens were deposited onto exchanges, reinforcing the view that short-term selling pressure is intensifying.

This trend is supported by the positive exchange netflow, which indicates that inflows are exceeding withdrawals. Exchange netflow turning positive typically signals reduced confidence among holders and increased distribution behavior. The SHIB price has trimmed year-to-date gains as a result, dropping from highs above $0.000009 to around $0.000008752 at the time of writing.

What Do Derivatives Indicators Say About SHIB's Outlook?

Derivatives data further complicates the picture. CoinGlass data shows a decline in SHIB's trading volume and open interest, with volume dropping by just over 5% to $203 million and open interest falling by over 7% to $108 million. Despite these bearish signals, the long/short ratio remains above 1, indicating that most traders are still bullish on the token.

Active address data has also provided mixed signals. The number of daily active SHIB addresses has increased since the start of the year and has remained above 3,000. This suggests that attention is returning to the SHIB ecosystem, which could support the price once broader market conditions improve.

How Is the Broader Market Affecting SHIB?

The SHIB price is being influenced by broader market trends, particularly in Bitcoin. Bitcoin's price has dropped back to $90,000 after rising above $94,000 at the start of the year. This broader bearish sentiment has likely contributed to the increased selling pressure on SHIB and other altcoins.

In addition to Bitcoin's movements, SHIB's token velocity has remained high. While this can indicate growing adoption, it also suggests rapid turnover and speculative activity. High velocity in combination with rising exchange inflows implies that SHIB is being moved quickly through the market, a pattern often seen during periods of distribution.

The market remains vulnerable to further declines as long as exchange inflows continue to rise. A slowdown in deposits and a shift toward steady outflows would be necessary for any meaningful recovery. Such a shift would indicate that holders are preparing to remove SHIB from exchanges, reducing the risk of immediate sales.

At the current time, SHIB appears to be in a corrective phase rather than a full-fledged rally. While short-term price action has shown some resilience, the broader trend remains bearish. Sustained exchange outflows and increased demand on the spot market would be required for a bullish continuation. Until then, SHIB remains under pressure from both on-chain and price action signals.