At $0.000007, Shiba Inu (SHIB) price has gained 3% this week. Vital on-chain indicators provide insights into how Bitcoin’s (BTC) growing market dominance could impact SHIB price action.
This week, Shiba Inu’s 3% price bounce is significantly lower than other high-performing mega-cap assets like Bitcoin (BTC) and Solana (SOL). What does the future hold for the second-largest memecoin by market capitalization?
SHIB Supply on Exchanges Remains High Despite Crypto Market Recovery
Global interest in the memecoin sector has waned in recent months. Due to the escalating crisis in the Middle East, Bitcoin has encroached on more market share as investors’ risk appetite declines.
This raises major red flags that could exacerbate disinterest in the memecoin sector. This could leave SHIB on the fringes amid the ongoing market rally.
Indicatively, Shiba Inu holders seem to be bracing for early-profit taking. After moving over 1 trillion SHIB tokens into crypto exchanges over the last three weeks, the SHIB market supply currently appears saturated.
According to on-chain data compiled by CryptoQuant, Shiba Inu Exchange Reserves recently grazed a 60-day peak of 170 trillion SHIB on October 17 before dropping slightly toward 169.4 trillion on Friday.
The inflows, which began on October 8, have now brought the total SHIB Exchange Supply to a 50-day peak of 169 trillion.
Exchange Supply provides a real-time snapshot of investors’ total deposits currently held in exchange-hosted wallets. A significant increase in Exchange Reserves typically means the market is flooded with excess token supply.
With SHIB Exchange Supply at significant peaks, many holders could quickly exit at favorable prices rather than stick around for a long-term price rally.
Network Traction Has Not Improved, Suggesting Piggybacking Upswing
The current SHIB Transaction Count trend is another vital on-chain indicator pointing towards a dismal SHIB price performance. According to CryptoQuant, Shiba Inu has not witnessed a significant uptick in network activity this week.
In fact, Shiba Inu’s daily transactions have declined despite this week’s uptick in price.
The chart below illustrates that the 4,218 SHIB Transaction Count recorded on October 18 is the lowest since May 2023. This suggests that Shiba Inu’s 3% price bounce resulted from piggybacking on the market-wide bullish wave rather than organic growth in its own network activity.
Transaction Count summarizes the daily number of transactions conducted on the Shiba Inu network. A decline in transaction count suggests a drop in network demand, which is a critical bearish indicator.
As seen above, despite the 3% price upswing this week, the number of economic transactions involving the SHIB token is still in decline.
Without a significant increase in underlying network demand, the market demand for SHIB tokens will likely falter, leading to a bearish price reversal in the coming days.
Read More: How To Make Money in a Bear Market
SHIB Price Prediction: The $0.000008 Resistance Could Trigger a Reversal
Based on the recent on-chain data trends, Shiba Inu is unlikely to garner enough momentum to clear the $0.000008 resistance.
The Global In/Out of the Money (GIOM) chart, which depicts the entry price distribution of current Shiba Inu holders, also validates this prediction. It shows that 430,400 addresses purchased 299.6 trillion SHIB at a minimum price of $0.000008.
Considering the weak network demand and high exchange supply, they will likely book early profits and trigger a bearish reversal.
But if the bulls can keep piggybacking on the bullish wave in broader crypto markets, Shiba Inu’s price could edge closer to $0.000010
Alternatively, the bears could force a downswing if the SHIB price drops below $0.00005. However, 52,540 addresses had bought 19.3 trillion SHIB at the maximum price of $0.000007. If they book early profits as predicted, SHIB’s price will likely retrace toward $0.00005.
But if that support level holds, Shiba Inu’s price could rebound to the $0.00007 range.
Disclaimer
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