Shiba Inu [SHIB]’s recovery back above the $0.000010 price level is an important sign that it has experienced significantly strong demand. This is especially the case after bottoming out slightly below $0.0000080 in June. But should investors be buying considering the latest outcome?
SHIB’s current price floor is a good sign that there is strong demand at that level. However, it does not necessarily guarantee that prices will not drop. Fortunately, there are other aspects to consider that build a strong case for buyers. For example, Shiba Inu’s supply continues to diminish thanks to token burns.
Roughly 56 million Shiba Inu tokens were burnt in the last 24 hours alone according to shibburn.com. It currently has a 29.58% burn rate, which means its supply is gradually reducing. This will compound over time and a lower circulating supply will contribute to SHIB’s long-term value.
Navigating short-term headwinds
While Shiba Inu’s long-term outlook remains firm, short-term volatility means there is more volatility. Looking at the price chart may present some conflicting information. For example, the price has seen some upside and so has the Relative Strength Index (RSI), but the Money Flow Index (MFI) indicates significant outflows in the last few days.
Source: TradingView
One might conclude that whales have been making a profit after the uptick since mid-June. A look at some on-chain metrics may help arrive at a similar conclusion. The supply held by whales metric suggests that whales have been selling in the last five days.
Source: Santiment
A notable uptick in the whale transaction count metric confirms that SHIB whales have been active in the last few days. However, the observations are not consistent with major selloffs by whales. In fact, the supply distribution by the balance on addresses confirms that different whale classes have been accumulating.
Addresses holding more than 10 million SHIB coins remained relatively constant in the last 30 days. This confirms that they have not been selling, hence contributing to its ability to maintain above the $0.000010 price level. Addresses holding between one million and 10 million coins increased their holdings significantly from 0.196% on 3 July to 0.197% by 9 July.
Source: Santiment
Addresses holding between 100,000 and one million SHIB tokens also achieved a marginal increase in their holdings.
Is whale accumulation enough?
Although the whales are accumulating, the resulting buying pressure remains limited. This is likely because the data represents a small percentage of that buying. Most crypto investors are still leaning on the side of caution. However, the whale activity is still a healthy sign of the level of demand that SHIB is experiencing.
