SHIB Hits Lowest Exchange Balance Since Mar ’22

In A Nutshell

The Shiba Inu (SHIB) cryptocurrency has reached its lowest exchange balance since March 2022. This decrease in exchange reserves could indicate a potential reduction in selling pressure. However, current market trends and indicators suggest a bearish sentiment among investors, with various metrics showing increased selling activity and market participants exiting their positions.

Understanding SHIB’s Exchange Reserve Decline

Recent data from Glassnode reveals a significant drop in SHIB’s exchange reserves, with a 7% reduction year-to-date. Currently, exchanges hold 147 trillion SHIB, marking the lowest point in two years. Typically, a decline in an asset’s exchange reserve is associated with decreased selling pressure, but the broader market context must be considered.

Market Sentiment and Indicators

Despite the drop in exchange reserves, the SHIB market has demonstrated bearish signals. The Awesome Oscillator, an indicator of market momentum, has shown a consistent pattern of red upward-facing bars since March 10, suggesting a decrease in bullish momentum. Furthermore, SHIB’s Moving Average Convergence Divergence (MACD) indicator confirmed the bearish trend with a crossover below its signal line on March 14, leading to a 33% decrease in SHIB’s value, according to Coingecko.

The Money Flow Index (MFI) and Chaikin Money Flow (CMF) indicators also point towards increased selling pressure and market liquidity exit, respectively. These indicators align with a bearish outlook for SHIB in the short term.

SHIB’s Futures Market Response

In response to the bearish sentiment, SHIB’s Futures market has seen a significant decrease in Open Interest, dropping by 36% since March 6, as reported by Coinglass. This decline suggests that investors are closing their positions without opening new ones, further confirming the bearish market sentiment.

Our Take

The current state of SHIB’s exchange reserve and market indicators provide a mixed signal to investors. While the decrease in exchange reserves could traditionally signal a bullish trend, the prevailing bearish sentiment and market indicators suggest caution. Investors should closely monitor these developments and consider the broader market context when making investment decisions.

Given the dynamic nature of the cryptocurrency market, it’s essential for SHIB holders and potential investors to stay informed and cautiously navigate the market, especially during periods of increased volatility and bearish trends.