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With about 178 billion SHIB flowing back onto exchanges, Shiba Inu's most recent attempt at recovery has suffered a major setback, raising concerns that selling pressure may continue to build throughout the market. On-chain data indicates that exchange reserves increased back above 80 trillion SHIB on Monday while exchange inflows surged.
Supply is back
Shiba Inu saw a surge in availbale supply in the last 24 hours. The gradual decline of exchange reserves toward the 80 trillion threshold was closely observed by us and covered a few days ago. However, it seems like things will get back to normal sooner than expected.
A break below that level was seen by many as a possible long-term bullish catalyst, indicating that investors were shifting tokens into self-custody and decreasing the amount of liquid supply that could be sold. Rather, that trend has been momentarily reversed by the most recent wave of inflow.
Shiba Inu sell-off intensifies
The return of 178 billion SHIB to exchanges increases the quantity of supply that is easily traded, but it does not automatically ensure a sell-off. Large exchange inflows have historically been associated with increased market volatility, profit-taking activity, or liquidation preparations.
Alongside the on-chain advancements, the technical situation has gotten worse. A rising wedge structure that had been sustaining price action since March was recently breached by SHIB below its lower boundary. The asset returned to its annual lows as a result of the breakdown, which disproved a possible bullish continuation setup.
The token is currently trading below its 50-, 100-, and 200-day moving averages, indicating that the overall trend is still extremely negative. Momentum indicators don't give much hope. Due to declining demand and ongoing seller control, the Relative Strength Index has dropped toward the mid-30s.
The most crucial level is currently located at $0.0000053, close to the most recent support zone. SHIB may experience additional downward pressure as traders give up on expectations of a quick recovery if sellers are able to force a clear breakdown below this level. Rising exchange reserves, significant inflows, and a technical breakdown make it hard for bullish investors to ignore.
Dan Burgin
