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

Key takeaways

• Shiba Inu is hovering around $0.00000516, following a nearly 4% bounce earlier this week.
• Large whale wallets holding between 1 million and 100 million SHIB have divested a combined 40 billion tokens since August 22.
• In contrast, smaller whale addresses purchased 990 million SHIB during the same timeframe.
• The derivatives market leans bearish, with SHIB’s long-to-short ratio sitting at 0.93.

On Wednesday, Shiba Inu was valued at approximately $0.00000516, stabilizing after a nearly 4% price bounce earlier in the week. Despite this modest recovery, heavy selling by large holders and weak derivatives indicators suggest market participants remain highly cautious about the meme coin’s near-term prospects.

While SHIB has managed to stay above its 50-day exponential moving average (EMA), mounting sell-side pressure threatens to trigger another downward slide.

Large SHIB whales trim their positions

According to Supply Distribution data from Santiment, some of the largest Shiba Inu holders are adopting a bearish stance. Wallets containing 1 million to 10 million SHIB, alongside those holding between 10 million and 100 million tokens, have collectively offloaded 40 billion SHIB since August 22.

This wave of selling occurred just as SHIB’s price began to recover, indicating that major investors chose to lock in profits rather than bet on a sustained rally. If this distribution trend continues, the influx of market supply could stifle SHIB’s upward momentum.

In contrast to these larger players, smaller whales have been buying. Addresses holding between 100,000 and 1 million SHIB accumulated roughly 990 million tokens over the same period.

This divergence reveals a shift of tokens from major holders to smaller market participants. However, the 990 million SHIB accumulated by these smaller accounts is a fraction of the 40 billion SHIB sold by larger wallets. This significant gap suggests that current demand may be insufficient to fully absorb the selling pressure from high-volume holders.

Sentiment in the derivatives market also reflects this caution. Data from CoinGlass shows that SHIB’s long-to-short ratio was 0.93 on Wednesday. Because this figure is below 1.0, it indicates that short positions outnumber longs, signaling that most derivatives traders are positioned for further declines.

On-chain metrics from CryptoQuant paint a similarly guarded picture. While activity in both spot and futures markets has picked up—with large whale orders hitting the futures market following the recent price rise—other indicators remain neutral, pointing to a highly uncertain outlook rather than a clear bearish trend.

SHIB bounces off the 50-day EMA

SHIB’s nearly 4% rebound was sparked by a retest of its 50-day EMA near $0.00000489. This level currently serves as the token’s primary near-term support, and the influx of buyers during the latest drop suggests there is still solid demand at lower price points.

If SHIB can sustain its position above this threshold, renewed buying pressure could push the price toward the 200-day EMA at $0.00000569. Clearing this longer-term moving average would significantly strengthen the bullish outlook and potentially open the door to higher resistance zones.

However, momentum indicators paint a conflicting picture of trader sentiment. On the daily chart, the Relative Strength Index (RSI) stands at 54 and is climbing, suggesting that bullish momentum is slowly building above the neutral 50 threshold.

Conversely, the Moving Average Convergence Divergence (MACD) indicator printed a bearish crossover on Sunday, accompanied by expanding red histogram bars that signal persistent downward momentum.

This conflict between the RSI and the MACD underscores the market’s indecision as SHIB consolidates between its key moving averages.

Should selling pressure intensify, SHIB risks falling back to test the 50-day EMA at $0.00000489. A daily close below this support level would invalidate the recent recovery and likely pave the way for a deeper correction.

On the other hand, if the 50-day EMA holds, buyers may get another opportunity to challenge the 200-day EMA at $0.00000569. SHIB’s next major trend will likely be decided by whether retail demand can absorb ongoing whale distribution and reverse the bearish bias currently dominant in the derivatives market.