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On-chain data suggests Shiba Inu may be getting set for a substantial uptrend as the SHIB reserves of centralized exchanges continue to dry up.
Shiba Inu recently encountered opposition at the $0.000028 threshold during its recovery move. SHIB later gave up the bullish ride and collapsed to as low as $0.00002457. Despite the bearish outcome, it still retails a 12.5% gain in its cumulative seven-day performance.
Meanwhile, on-chain data suggests a more sustained upsurge for SHIB may be around the corner. In particular, the supply of Shiba Inu on centralized exchanges has been in a downtrend since at least the last six months. Data from analyst platform CryptoQuant illustrates this trend.
The Trend of Shiba Inu Reserve on Exchanges
During SHIB’s peak at $0.00008845 in October 2021, the supply of SHIB on exchanges stood at around 149 trillion units. In March 2022, a sudden upsurge in the number of SHIB tokens on exchanges emerged, reaching a total of around 191 trillion. During this period, SHIB had dipped to around $0.000024.
With the influx of SHIB tokens onto exchanges enduring, Shiba Inu experienced further significant drops, plummeting to below $0.000007 by June 2022. This decline coincided with the exchange supply nearing 200 trillion tokens.
In the following months, the quantity of Shiba Inu tokens available on exchanges steadily decreased. Currently, it stands at approximately 157 trillion tokens, a level not seen since February 2022.
Shiba Inu Takes Impact as Supply Drops
In late February, a more pronounced decline in the supply of Shiba Inu tokens on exchanges was observed, preceding a significant rally.
For instance, on February 21, Shiba Inu was trading at $0.00000956, with over 162.5 trillion SHIB tokens available on exchanges. However, by March 5, when the exchange reserves had decreased by 4 trillion tokens as Shiba Inu hit a multi-year high of $0.000045.
The underlying factor is that as the number of Shiba Inu tokens available for trading on public platforms decreases, a scarcity element comes into play. This scarcity has the potential to drive price appreciation, provided that demand remains stable.
Lola, a well-known figure in the Shiba Inu community, recently weighed in on the decreasing supply trend in a post on X. She urged the SHIB Army to hold onto their SHIB tokens and not sell for less, projecting a potential uptrend.
#SHIB Shiba Inu’s Supply on Exchanges Drops to Two-Year Low as $SHIB Price Surges 👇#SHIBARMY not selling and more people buying so exchange supplies are dropping 😆 Dont sell for less – let them market buy a higher price 🚀🔥https://t.co/cUspsikRjC
— Lola (@CryptoLollla) April 25, 2024
Next Target for SHIB
Although the extent to which Shiba Inu’s price will respond to this trend remains uncertain, community analyst SHIB Knight has made a suggestion. Specifically, the analyst argued that SHIB can watch out for a rally that takes the asset to $0.000055 soon.