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Although Shiba Inu has put on an impressive comeback, a number of on-chain metrics indicate that the rally might be nearing a crucial pause. Investors should not overlook the growing sell-side pressure indicated by underlying data even though the short-term price action appears to be strong.
Liquidity is piling up
Exchange netflow provides the most direct warning signal. In a brief period of time, about 192 billion SHIB have been deposited onto exchanges. Netflow calculates the difference between tokens coming into and going out of exchanges. It typically indicates that holders are preparing liquidity for possible selling when it makes a sharp positive turn. Large inflows greatly increase the likelihood of distribution during or after a rally, but they do not ensure an instant decline.
Exchange reserves, which have risen back above 82 trillion SHIB, are closely related. The number of tokens held on trading platforms is monitored by exchange reserves. Increasing reserves show that the market is getting easier access to supply. In the past, as sell pressure steadily increased, periods of price stagnation or declines have been preceded by steady increases in SHIB exchange reserves.
Active addresses on the rise
Active addresses are the third metric to keep an eye on. Although there has been a slight increase in the number of active wallets, the growth rate is still slower than during previous breakout phases. This implies that while participation is increasing, it is not growing quickly enough to handle a significant increase in exchange-side supply.
Alongside the price, healthy rallies usually exhibit robust and accelerating address growth. Lastly, the number of transactions has slightly increased, but context is important. Growth in transactions without a corresponding drop in exchange reserves frequently indicates short-term trading rather than long-term accumulation.
To put it another way, tokens are moving, but conviction buyers are not always locking them away. Shiba Inu has experienced a significant price increase following a protracted decline, regaining short-term levels and causing momentum indicators to turn positive. The asset is still below significant long-term resistance levels, though.
Historically, sellers have been drawn to these locations, particularly when exchange deposits are increasing. When combined, these four metrics present a cautious image. Although the rally is genuine, long-term demand indicators are not confirming it, and supply is rising.
Tomiwabold Olajide
Gamza Khanzadaev
Arman Shirinyan
Alex Dovbnya
Yuri Molchan