Shiba Inu’s 140 Billion SHIB Exchange Outflow: Implications for Market Liquidity

New Shiba Inu on-chain data indicates a significant change in the way holders are arranging themselves. One of the most notable short-term outflow periods in recent weeks has occurred over the last three days, with approximately 140 billion SHIB tokens experiencing a net exit from exchanges.

Exchange netflows pile up

Exchange netflow quantifies the variation in tokens coming into and going out of trading platforms. When netflow becomes negative, it indicates that more tokens are being taken out than put in. This usually indicates that holders are shifting their assets from being easily sold to being kept in long-term storage or private wallets. Practically speaking, fewer tokens on exchanges can lessen the pressure to sell right away.

This phase of transition is reflected in price action. Recently, a short-term consolidation pattern on SHIB experienced a significant breakdown, driving the price down to new local lows. However, following a steep sell-off, the price started to level off and form a tiny stabilization range slightly above the $0. 000006 region. Spikes in volume during the decline imply that weaker hands may have already been flushed out by capitulation selling, while the volume’s subsequent cooling suggests that selling pressure is softening.

SHIB stock thinning

If holders are actually removing SHIB from exchanges for staking or longer-term holding, the amount of circulating stock that can be sold right away decreases. Although it can help create a base where the price starts to consolidate before any recovery attempts are made, this does not ensure an immediate recovery. 

SHIB has continued trading below all of the major levels required for a recovery, which are still sloping downward, confirming the bearish nature of the overall trend. In these kinds of situations, rallies frequently encounter resistance fast and volatility may continue to be high.

Exchange outflows persist whether the price can rise above recent support to reach a higher low. Long-term outflows coupled with stabilization or a slow recovery would suggest accumulation. However, fresh selling pressure might force SHIB to retest recent lows, if inflows abruptly increase once more.

Although the data points to a possible cooling of sell-side pressure for the time being, patience is still needed to confirm a trend reversal.