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As exchange inflows continue to pick up speed, Shiba Inu is under increasing pressure and is substantially close to a critical threshold that could reinforce the negative narrative surrounding the meme coin.
Shiba Inu stays pressured
The most recent on-chain data shows that total exchange inflows have risen to over 407 billion SHIB, easily exceeding the 390 billion mark that traders had been keeping a careful eye on. Token holders may be more inclined to move their assets into liquid trading venues. However, this development is rarely seen as a bullish signal.
The quantity of cryptocurrency moved into exchange wallets is represented by exchange inflows. While inflows do not automatically result in selling activity, they increase the amount of readily available supply and often precede periods of heightened volatility. Bulls are even more concerned about the metric when it is coupled with declining price action.
Over the past few sessions, the overall on-chain picture has changed significantly. A portion of the long-term decline that many investors saw as a favorable supply-side trend has been reversed, as exchange reserves have risen above 80.25 trillion SHIB. Exchange net flows, on the other hand, continue to be strongly positive, suggesting that more SHIB are entering exchanges than are leaving them.
The increasing weakness is reflected in the technical outlook. A rising wedge structure that had sustained price action for the majority of the spring was recently broken by SHIB. The asset was forced back toward the lower end of its trading range by the breakdown, which invalidated recovery possibility. The token is still stuck below its 50-, 100-, and 200-day moving averages, indicating that sellers are still in control of the market structure.
Unlikeliness of a recovery
Momentum indicators are also not very helpful. The Relative Strength Index is still close to 36, indicating low demand and little enthusiasm for purchases. While the asset is approaching oversold territory, previous oversold readings during the current downtrend have failed to generate sustainable recoveries.
Currently, the most crucial level to keep an eye on is the support area around $0.0000054. Although the bulls have so far been able to defend it, support zones eventually deteriorate due to repeated testing. If sellers manage to break through this floor, SHIB may be in danger of losing even more value.
For the time being, increasing exchange reserves and inflows indicate that bears are in control. In the near future, SHIB's price performance may continue to be impacted by the recent increase in supply available on exchanges unless buying demand quickly returns.
Dan Burgin
