Shiba Inu price might extend recovery with massive drop in supply on exchanges
|- Shiba Inu supply on exchanges has declined to its lowest level in six months, at 7.38% of the total SHIB supply.
- Shiba Inu’s trade volume climbed to its highest level in nearly three weeks, at 12.1 trillion SHIB tokens on Monday.
- SHIB price is likely to rally to $0.00001048 in its recovery.
Shiba Inu, one of the largest meme coins in the crypto ecosystem, has noted a decline in its token supply on exchanges in the past six months. SHIB supply on exchanges hit its lowest level since July 2023 and typically this is considered a bullish sign for Shiba Inu price recovery.
At the time of writing, SHIB price is $0.00000929 on Binance.
Shiba Inu exchange supply drops to record low on six-month timeframe
According to data from crypto intelligence tracker Santiment, Shiba Inu supply on exchanges as a percentage of the asset’s total supply is down to 7.38% on January 9. Six months ago, 8.60% of SHIB’s total supply was sitting in exchange wallets. This decline is key to Shiba Inu’s price recovery thesis since a drop in exchange reserves is typical of a price rise in an asset, since the selling pressure on the cryptocurrency drops.
SHIB is therefore expected to face less selling pressure on exchanges, allowing the meme coin to recover from its recent decline.
The exchange flow metric shows consistent outflows of SHIB from exchange wallets throughout January 2024.
SHIB supply on exchanges and exchange flow. Source: Santiment.
Another on-chain metric that is likely to catalyze SHIB gains is the trade volume. As of Monday, SHIB transaction volume hit its highest level in three weeks, 12.1 trillion tokens. Rising volume is typical of increasing activity in the asset and it likely reflects the demand for the cryptocurrency among market participants.
Shiba Inu transaction volume. Source: Santiment.
SHIB price likely ready for recovery rally
Shiba Inu price is currently above its 200-day Exponential Moving Average (EMA) at $0.00000890. The 10 and 50-day EMAs at $0.00000975 and $0.00000967, respectively, are likely to act as immediate resistances for SHIB price in its uptrend. The Fair Value Gap’s upper boundary at $0.00001048 is the first target for SHIB. This represents a 12.8% rally from the current price of $0.00000929.
If Shiba Inu price sees a daily candlestick close above the FVG and sustains its gains, the second target is the lower boundary of the second FVG ($0.00001802 to $0.00001825).
SHIB/USDT 1-day chart
A daily candlestick close below the 200-day EMA could invalidate the bullish thesis for Shiba Inu.
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