Shiba Inu holds above key support as whale selling raises downside risk

Key takeaways

• Shiba Inu trades near $0.00000516 after rebounding almost 4% earlier this week.
• Whale wallets holding between 1 million and 100 million SHIB have sold a combined 40 billion tokens since August 22.
• Smaller whales accumulated 990 million SHIB over the same period.
• SHIB’s long-to-short ratio of 0.93 signals bearish positioning in the derivatives market.

Shiba Inu traded around $0.00000516 on Wednesday after recovering nearly 4% earlier in the week.

Despite the rebound, whale selling and weakening derivatives data suggest that traders remain cautious about the dog-themed memecoin’s short-term outlook.

SHIB continues to hold above its 50-day exponential moving average, but growing selling pressure could increase the risk of another decline.

Large SHIB whales reduce their holdings

Santiment’s Supply Distribution data signals a bearish shift among some of Shiba Inu’s largest holders.

Wallets containing between 1 million and 10 million SHIB and those holding between 10 million and 100 million tokens have collectively sold 40 billion SHIB since August 22.

The selling followed SHIB’s recent price recovery and may indicate that larger holders are taking profits rather than positioning for an immediate extension of the rally.

Sustained whale distribution could place additional supply on the market and make it more difficult for SHIB to maintain its upward momentum.

While larger wallets reduced their positions, smaller whales moved in the opposite direction.

Addresses holding between 100,000 and 1 million SHIB accumulated approximately 990 million tokens during the same period.

The contrasting behavior indicates a transfer of supply from larger holders to smaller participants. However, the amount accumulated by smaller whales remains substantially below the 40 billion SHIB sold by the larger groups.

This imbalance suggests that new demand may not be strong enough to fully absorb the tokens being distributed by bigger holders.

Shiba Inu’s derivatives market also points to cautious sentiment. CoinGlass data showed that SHIB’s long-to-short ratio stood at 0.93 on Wednesday. 

A reading below 1 means short positions outnumber long positions, indicating that more traders expect the token’s price to fall.

CryptoQuant’s data presents a similarly cautious picture. SHIB’s spot and futures markets are showing signs of heightened activity, while the futures market has recorded large whale orders following the recent price increase.

Other indicators remain neutral, leaving the broader outlook mixed rather than decisively bearish.

SHIB rebounds from the 50-day EMA

SHIB’s nearly 4% recovery followed a retest of its 50-day EMA near $0.00000489. This moving average is currently the token’s most important near-term support. Its ability to attract buyers during the recent decline suggests that demand remains present at lower levels.

If SHIB holds above this support and buying pressure increases, the recovery could extend toward the 200-day EMA at $0.00000569.

A breakout above the 200-day EMA would strengthen the bullish case and could encourage traders to target higher resistance levels.

Shiba Inu’s momentum indicators reflect uncertainty among traders. The Relative Strength Index stands at 54 on the daily chart and continues to rise. 

Its position above the neutral level of 50 indicates that bullish momentum is gradually improving.

However, the Moving Average Convergence Divergence indicator produced a bearish crossover on Sunday. Expanding red histogram bars also suggest that downward momentum remains active.

The disagreement between the RSI and MACD supports a cautious outlook as SHIB consolidates between its key moving averages.

If selling pressure increases, SHIB could fall back toward the 50-day EMA at $0.00000489.

A decisive daily close below this level would weaken the recovery and could expose the token to a deeper correction.

Conversely, continued support above the 50-day EMA could allow buyers to challenge the 200-day EMA at $0.00000569.

SHIB’s next significant move will likely depend on whether retail demand can absorb continued whale selling and reverse the bearish positioning visible in the derivatives market.