Shiba Inu (SHIB) Price at Risk as Dormant Holders Move Tokens
Shiba Inu (SHIB) has experienced a flurry of unusual activity that could have an adverse effect on its price. Lately, its price has been nothing to write home about, as it has seen a seven-day drop of 9.33%.
The main reason for this thesis is the surge in Shiba Inu’s 90-day dormant circulation. As the name suggests, dormant circulation represents the number of different tokens that are traded on a particular day, even if they have not moved for a long time.
Typically, a surge in idle circulation leads SHIB’s price to fall to lower levels. This is because a surge in trading volume of previously idle tokens indicates that long-term holders are cashing out.
Historical experience shows that increased cashing out by long-term holders puts downward pressure on prices. Furthermore, the chart below shows that the dormant circulation on July 23 was 47.46 billion, but as of the time of writing, the number is 211.78 billion.
An additional 150 million tokens entering circulation is bearish for SHIB, especially if market buy orders are unable to absorb the selling pressure.
Exchange inflows track the amount of tokens sent to exchange addresses from external sources (cold wallets in most cases). When this number jumps, token holders are ready to sell.
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However, the decline suggests that participants are withdrawing assets from these platforms for long-term holding, which is good for the price.
Earlier in the day, SHIB exchange inflows exceeded 1 trillion, indicating that the token is facing significant selling pressure.
At press time, the price of SHIB is $0.000017. As with the on-chain aspects explained above, from a technical perspective, the price of the memecoin may fall.
