On-chain data has revealed that an unknown major investor is holding more than 10% of the Shiba Inu token supply, raising fresh concerns around the distribution of the world’s second-largest memecoin.
A mysterious Shiba Inu whale (SHIB) owns more than 10% of the token's total supply across 150 addresses.
Although their holdings were worth more than $5 billion at their peak valuation, according to a November 19 post by blockchain data firm Bubblemaps, the “whale” has continued to hold onto his SHIB coins since 2020:
“Between August and October 2020, a new player entered the scene: 0x1406 bought 103T $SHIB (10% of supply) for just 38 ETH. At the time, 38 ETH was worth $10,000. Today, 103T $SHIB is worth over $2.5 billion.”
Since October 2020, this investor has made a return of more than 250,000 times his initial investment of just $10,000, equivalent to more than $2.5 billion today, "possibly the largest transaction in history," according to Bubblemaps.
Whales with large holdings can have a significant impact on the price action of cryptocurrencies. A whale could create significant downward pressure on the SHIB token if he decides to sell a significant portion of his holdings on the open market.
The Shiba Inu may be the sleeping giant of this growth cycle.
Despite securing a return of over 250,000 times on their investment, investors have not sold any of their SHIB shares — a sign of confidence in the memecoin’s future potential. Cointelegraph data shows that the Shiba Inu price is now up over 134% year-to-date and over 27% over the past month.
While the token has underperformed some of the other top memecoins, Shiba Inu could be the sleeping giant in this bull run, according to market analysis. The first major signal for SHIB’s rally came from the repeated formation of a cup and handle setup. This bullish chart pattern typically resolves in a breakout, with the upside price target measured by adding the maximum height of the pattern to the breakout point.
Is there going to be a capital rotation from SHIB to DOGE?
The price of Shiba Inu could also rise as capital flows away from its main dog-themed competitor, Dogecoin (DOGE). Shiba Inu has underperformed Dogecoin largely due to Elon Musk’s continued promotion of the Department of Government Efficiency, a government agency he founded to cut excessive government spending, which interestingly shares the same acronym as Dogecoin’s ticker, DOGE. Capital flows could occur as the SHIB token becomes oversold relative to the DOGE token.
Data from TradingView shows that Shiba Inu’s relative strength index (RSI) is at 14.71 against Dogecoin, indicating that SHIB’s price is oversold and selling pressure against DOGE is low. RSI is a popular momentum indicator used to measure whether an asset is oversold or overbought based on the magnitude of recent price changes.
