Recent on-chain data reveals a significant withdrawal of Shiba Inu whales from exchanges, potentially impacting the price of SHIB.
This article explores the implications of this trend, focusing on the decreasing SHIB supply on exchanges and its potential influence on the coin's valuation.
Along with expert analysis, we present insights into the behavior of investors, shedding light on the future price prediction of SHIB crypto.
Decreasing Supply On Exchanges Enhances Investment Prospects
As highlighted by an analyst in a comprehensive post published on X, there has been a substantial drop in the Shiba Inu supply held on exchanges.
This metric, known as "supply on exchanges," tracks the percentage of the total circulating Shiba Inu supply housed within centralized exchange wallets.
Despite a recent market downturn that affected SHIB's progress, seasoned industry experts suggest it should not discourage potential investors. Notably, SHIB has experienced a remarkable gain of over 60% in recent months.
The supply of SHIB tokens on cryptocurrency exchanges has witnessed a noteworthy decrease, plummeting to 7.58% on December 12.
To put this into perspective, this figure stood at nearly 9% in June of the same year, according to a post by crypto analyst Trader Kamikaze on X.
“Less SHIB on exchanges generally means reduced selling pressure, setting the stage for potential gains.” Crypto analyst Trader Kamikaze added.
#Crypto intelligence tracker @santimentfeed reveals a fascinating trend: $SHIB supply on exchanges has fallen by 0.51% since November 12, now at 7.85%! Less SHIB on exchanges generally means reduced selling pressure - setting the stage for potential gains.#Shibarium #ShibaArmy pic.twitter.com/zycIUOg8sV
— 山丨ㄥㄥ Trader_Kamikaze 🇧🇷 🤘 (@trader_kamikaze) December 12, 2023
Fewer SHIB tokens on trading platforms and the shift towards self-custody methods are generally regarded as positive developments for the meme coin's valuation.
Moreover, this shift effectively removes immediate selling pressure. Conversely, if the percentage of SHIB supply on exchanges increases, it may indicate an impending price correction.
Notably, a lower value of this metric implies that investors are presently transferring a considerable number of coins from centralized exchanges to their self-custodial wallets.
This migration of funds usually indicates a long-term holding strategy, potentially providing an optimistic outlook for the cryptocurrency's price.
Meanwhile, an increase in the indicator's value may serve as a bearish signal since holders could deposit their coins on exchanges for selling purposes.
A Closer Look at SHIB Supply Trends for Informed Price Predictions
Over the past month, the supply of Shiba Inu on exchanges has experienced a significant drawdown, amounting to approximately 0.51% of the total circulating supply, leaving centralized exchanges.
These withdrawals coincided with a recent rally in the coin's price. It is plausible to infer that these outflows were initiated by influential whales, contributing to the overall increase in value during this period.
Though SHIB has experienced a decline since reaching its local peak, investors seem unfazed by this downturn as the withdrawal trend continues.
While short-term price effects can result from exchange outflows, observing the trend itself offers insight into potential long-term implications.
For the stability of any cryptocurrency, it is crucial to avoid the concentration of significant supply within central entities.
Collapses like those experienced by FTX in 2022 have demonstrated the market's interdependence with centralized exchanges.
However, continued outflows from exchange reserves can pave the way for a more independent market environment.
In recent months, Shiba Inu has witnessed substantial supply exiting exchanges, a positive development for the cryptocurrency.
Following these outflows, only 7.85% of the memecoin's supply remains under the control of centralized entities.
Despite the recent price decline, SHIB has accomplished significant milestones. Shibarium, its layer-2 blockchain solution, has consistently achieved record-breaking daily transactions since the beginning of December, propelling the total network transactions close to the impressive 100 million mark.