Shiba Inu (SHIB) continues to face a significant struggle, remaining entrenched in a persistent downtrend despite intermittent green candles and brief price bounces. The cryptocurrency's price action and underlying market dynamics paint a clear picture of an asset under immense pressure, with technical indicators and fundamental supply issues hindering any sustained recovery.
Persistent Bearish Pressure and Supply Overhang
SHIB's inability to maintain upside momentum is largely attributed to an overwhelming supply of tokens readily available on exchanges. With approximately 81.5 trillion SHIB currently held in exchange wallets, any rally is quickly met with a substantial wall of potential sell pressure. This vast supply allows long-term holders to offload their positions even during minor upward movements, indicating a lack of demand depth sufficient to absorb the available supply. Technical analysis further supports this bearish outlook, with SHIB trading below all major moving averages, compressed volatility suggesting continuation rather than reversal, and momentum indicators pointing to exhaustion rather than accumulation. The recent price drops have been characterized by persistent distribution rather than panic selling, with active sellers evidenced by volume spikes on red candles and a lack of follow-through on green ones.
Limited Reversal Signs and Future Outlook
While there has been a slight decline in SHIB exchange reserves—approximately 500 billion tokens over the last year—this reduction is negligible when compared to the total supply and the rate at which it would need to decrease to impact supply dynamics meaningfully. The gradual bleeding of reserves, rather than a collapse, suggests that a significant portion of SHIB remains liquid and is not being transferred to long-term cold storage. This continued liquidity ensures that rallies will likely be short-lived until this dynamic changes significantly. Looking ahead, SHIB faces two primary short-term scenarios: a sideways grind or a weak bounce as sellers temporarily retreat. However, without a drastic reduction in exchange balances or a substantial surge in demand, the asset remains vulnerable to further price depreciation in the medium term.
