Shiba Inu's performance in the last 40 days was not something that most investors continuously increasing their positions would expect from a token that showed a 1000% gain in two weeks, and some of the token's supporters are dropping it.
SHIB dominance continuously dropping
For a long time, Shiba Inu was the most popular holding among whale-tier addresses on Ethereum blockchain, with its dominance reaching up to 50% at its peak. But since then, the token's popularity has dropped drastically. For now, it barely competes with tokens like FTX and USDT.
While whales are not rushing to sell their holdings at the moment, some have already dropped a major portion of SHIB by reducing their positions by millions of dollars. According to volume data, whales are less likely to sell their holdings in the foreseeable future due to the absence of liquidity on SHIB markets.
Reasons for popularity drop
The main reason for whales to drop some portion of their holdings is most likely the performance of a token that has not yet shown any signs of recovery since its peak back on Oct. 28.
But in addition to negative market performance, Shib has also been losing an important viable investment option, which is liquidity and volatility. According to TradingView, weekly average volatility on Shib has returned to pre-pump times with an average of 3%.
In addition to losing volatility, Shib became less liquid, which means that any major selling pressure would launch the asset directly on the bottom. With current holdings, Shiba Inu whales could easily drop the asset's price by more than 50% due to the absence of buying power on the market.