What happened?
The supply of Shiba Inu (SHIB) tokens on exchanges increased by 2 trillion in May, signaling a potential shift in market sentiment. This influx of tokens has coincided with a developing bearish flag pattern, which could impact SHIB’s price negatively. Despite a general rise in altcoins since mid-April, SHIB has dropped over 20% throughout May, pushing it out of the “best crypto to buy” discussions.
Who does this affect?
This situation primarily affects SHIB investors who are using either HODL strategies or engaging in short-term trading. The increased token supply on exchanges suggests more traders are opting for quick trades instead of holding, which might lead to heightened volatility. Additionally, it could impact potential new investors considering adding SHIB to their portfolios as they may face increased risk due to these market changes.
Why does this matter?
The increase in SHIB tokens on exchanges and the formation of a bearish pattern could have significant market implications, potentially leading to a sharp decline in SHIB’s price if support levels fail. This could result in a 60% drop to $0.0000058, erasing gains from 2024 and affecting overall market sentiment towards SHIB. Such volatility might prompt investors to reevaluate their positions and consider diversifying their assets into more stable options like Bitcoin, which has shown resilience compared to other altcoins.