A 6.6% slump in Shiba Inu (SHIB +1.05%) over the past 24 hours (as of 2:30 p.m. ET) isn't necessarily the sort of price action that's going to raise alarms with most investors. That's because volatility is the name of the game in the crypto sector, and even more so in the more speculative ends of the market (with meme tokens being about as speculative as they come).
CRYPTO: SHIB
Key Data Points
That said, the elongated nature of Shiba Inu's decline across most time frames is increasingly causing anxiety among some investors in the world's 27th-largest token. Over the past year, Shiba Inu has been more than cut in half. Given the sentiment proliferating in the cryptocurrency sector right now, that's not great news for those looking to take advantage of the sort of face-ripping rallies we've seen in recent years.
Let's dive into the kind of selling pressure we're seeing, who's behind it, and what we can take away from this token's near-term price action.
Will this slump come to an end?
Source: Getty Images.
I think one of the more pertinent drivers of negative sentiment in Shiba Inu today comes from the composition of investors selling SHIB tokens. A recent report indicated that 24 billion Shiba Inu tokens were sold on the Binance exchange to a long-term holder. That's the kind of selling pressure most investors want to see, as so-called "whales" (large investors) like these can take a significant chunk of the overall supply out of circulation from time to time.
An indication that large investors could be looking to offload more of their holdings won't inspire confidence from retail investors looking to step into this weakness. And with transaction volumes and active address activity remaining weak (lower engagement driving total value locked to sub-$1 million), that's going to send some investors heading for the exits.
Personally, I have no idea when the carnage will end, but this feels a lot like the so-called "crypto winter" we saw play out in 2022. I think at this point, investors are trying to determine when we'll see a bottom form (as it did in 2022), or if things will end up being a lot worse.
