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Title: 84,000,000,000,000 SHIB: This Reserve Could Be Problem for Shiba Inu
The massive reserve of 84 trillion SHIB tokens held by exchanges could pose a significant problem for the project, experts warn. The substantial concentration of supply on these platforms has created an impending hangover effect on price action.
This large amount of tokens being held in exchange reserves is not necessarily a sign of liquidity and accessibility, as it may initially suggest. Instead, it poses a severe threat to the token’s value due to its susceptibility to market makers, whales, and widespread retail panic.
The chart by TradingView shows that SHIB has been consolidating with decreasing volume within a descending triangle pattern. Historically, such patterns typically result in downward price action if demand fails to compensate for supply. Given this reserve, it seems unlikely that the token will be able to break above resistance levels without a significant shift in market conditions.
It appears that buyers may be hesitant to enter positions due to the enormous amount of tokens held by exchanges, causing SHIB’s price to remain suppressed under crucial moving averages like the 200-day SMA. In order to avoid losses, investors are advised to exercise caution and consider the structural supply issue before taking any investment decisions.
While it is not all doom and gloom for SHIB, a relief rally could be triggered if the token successfully exits its consolidation zone with high volume. However, any increase in value would likely be limited until there is a noticeable decline in exchange balances, indicating that tokens are being burned or moved to cold storage.
In conclusion, it is essential to take into account this critical information and adjust investment strategies accordingly.
Source: u.today
