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Recent insights from on-chain analytical firm Glassnode has identified how early Shiba Inu whales’ activities show why SHIB is trading sideways.
Shiba Inu had a strong start to the week, spurred by a broader market rebound. The meme coin surged to an intraday high of $0.00001360 on Monday but relinquished all its gains to close further lower at $0.00001295.
The retracement saw it close with a shooting star candlestick, a bearish indicator of further price rejections, and a possible dump to lower prices. Moreover, SHIB has followed the sideways trend, correcting over 2% already since the start of today.
Notably, the recent correction adds to Shiba Inu’s general price underperformance. The doggy-themed light-hearted meme coin has declined over 62% from its December highs of $0.00003343.
Shiba Inu’s Price Correlation with Early Whale Activities
Interestingly, Glassnode confirmed in a recent report that the price of the community-driven crypto asset has shown a strong correlation with activities from early holders. The analysis highlights the price behavior when these whales either accumulate or dump their stash.
Particularly, the report shows how Shiba Inu early whales bought 20% of the asset’s supply prior to the November 2021 price peak and how their activities confirmed the cycle’s top.
Per the analysis, whales bought over 117 trillion SHIB around July 2021. Glassnode traced these accumulations with three market indicators: the Herfindahl Index, the Net Unrealized Profit/Loss (NUPL), and the Cost Basis Distribution.
The Herfindahl Index measures market concentration and distribution among early large and small wallets. A decline in the metrics indicates that early whales are selling, marking a sentiment shift among these unique holders.
The unrealized profit and loss signal how much in profit or loss prompt buyers are. An early NUPL increase indicates most are in gains and precedes a sharp asset dump, significantly impacting prices.
Meanwhile, the Cost Basic Distribution provides insight into the average cost at which holders acquire tokens. The indicator shows where early adopters started accumulating the underlying asset—usually at a very low price. While it does not show when they resume dumping, the metric highlights when these early buyers might be inclined to sell.
Market Implications of These Early Holders’ Activity
Each metric highlighted an intense market early whale domination between January and July 2021 and a profit-taking disposition from the November price peak of $0.00008854 to the bear market in July 2022.
As a result, Glassnode indicated that these whales have a say in Shiba Inu’s price action. Furthermore, the analysis also highlighted a similar pattern of price pump and peak in assets like Pepe, APW, and TSUKA, reinstating the glaring influence of early holders’ activities, especially on speculative tokens.
Moreover, tracking the activities of these early adopters gives a sneak peek into market sentiments and helps indicate the market top. Their mass exit triggered an intense price decline in 2021, so a corresponding move could signal the cycle’s peak.
Interestingly, these early whales have remained largely quiet, sparking mixed reactions in the Shiba Inu ecosystem.