Large-scale investors, or “whales,” in the Shiba Inu ecosystem have significantly increased their sell-offs, creating substantial downward pressure on the token’s market price. On-chain data indicates a recent surge in liquidations from top wallets as SHIB struggles to maintain key support levels, raising questions about whether this is a short-term profit-taking event or the beginning of a larger market correction.

On-Chain Data Shows Increased Selling Pressure

Blockchain analysis reveals a distinct drop in token concentration among the largest Shiba Inu holders. Over the last two weeks, addresses holding over one billion SHIB have notably reduced their positions by transferring large volumes to cryptocurrency exchanges. While this could be seen as a positive move toward decentralization, the rapid pace of these transfers suggests a coordinated sell-off.

The net flow of SHIB to exchanges has risen sharply, directly impacting order books and increasing selling pressure. Market makers are finding it difficult to absorb the high volume, which has led to the breakdown of several support levels. The widening bid-ask spread also points to fragile liquidity and growing hesitation from potential buyers at the current price.

Although Shiba Inu’s price movement remains correlated with Bitcoin, it is underperforming the broader altcoin market. This relative weakness points to token-specific issues, primarily the large-scale distribution by whales that the market is struggling to absorb. A break below the current psychological support level could trigger a wave of automated stop-loss orders, further accelerating the downward trend.

Uncertain Outlook for SHIB Investors

The current market conditions present a challenge for investors. Momentum indicators like the Relative Strength Index (RSI) are in neutral territory, offering no clear short-term directional bias. However, the Moving Average Convergence Divergence (MACD) indicator is showing a bearish divergence, signaling that buying pressure is progressively weakening.

Spot trading volumes are moderate, which suggests a lack of strong conviction from either buyers or sellers. This market apathy could either precede a sharp price move once a direction is established or lead to continued range-bound trading. In the derivatives market, positions are relatively balanced between long and short contracts, and the near-zero funding rate reflects widespread indecision among traders using leverage.

On the development front, the Shiba Inu ecosystem continues to expand with its layer-2 network, Shibarium. For now, these fundamental advancements are not enough to offset the heavy selling from major holders. The market’s response to upcoming project announcements will be a key test of investor confidence amid these technical headwinds.

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