SHIB Nears Key Support Amid Whale Exits and Declining Retail Interest, Potential for Short-Term Relief

• Shiba Inu (SHIB) price struggles near key support amid significant whale exits and diminishing retail interest, signaling potential volatility ahead.

• Large institutional transfers to Coinbase and Binance highlight smart money movements, while retail transaction volumes decline, indicating a shift in market dynamics.

• According to COINOTAG, “Dormant wallets activating after long inactivity often mark critical sentiment changes or distribution phases.”

SHIB price hovers near crucial support as whale activity intensifies and retail participation wanes, creating a delicate balance with potential for sharp moves.

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SHIB Exchange Reserves Signal Reduced Immediate Sell Pressure

Shiba Inu’s exchange reserves have declined by 4.11%, bringing the total value of tokens held on exchanges down to approximately $1.076 billion. This reduction suggests a temporary easing of selling pressure, as fewer tokens are readily available for liquidation. However, this metric alone does not imply bullish momentum; it could also reflect prior large-scale offloads or whales transferring assets into cold storage for longer-term holding.

The current scenario presents a nuanced picture: while the drop in reserves might indicate a pause in aggressive dumping, it coincides with bearish price trends and significant whale exits. Traders should interpret this cautiously, as the market may be consolidating before the next directional move.

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Source: TradingView

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Whale Movements Outpace Retail Activity in SHIB Transactions

Analysis of SHIB transaction sizes reveals a stark divergence between large and small transfers. High-value transactions in the $100,000 to $1 million range surged by over 1,600%, indicating increased whale activity. Conversely, smaller transactions under $10 decreased by 12%, reflecting waning retail engagement.

This pattern is characteristic of distribution phases, where institutional investors offload holdings while retail participants reduce their involvement. The imbalance in liquidity absorption heightens the risk of rapid price declines if support levels fail to hold.

In essence, the market is witnessing a shift where whales are actively repositioning while retail investors retreat, potentially destabilizing established support zones.

Source: IntoTheBlock

SHIB’s Rising Short Interest Reflects Bearish Market Sentiment

The Funding Rate for SHIB has dropped to -0.0036%, indicating that traders are paying premiums to maintain short positions. This negative funding environment typically signals bearish sentiment and can precede either accelerated downside moves or short squeezes during rebounds.

Current liquidation data shows minimal forced exits, with short liquidations at $8,890 and long liquidations nearly negligible at $18.85. This suggests traders are exercising caution, avoiding excessive leverage or having already reduced their positions.

The subdued liquidation activity implies a low probability of sudden, explosive price swings driven by forced liquidations in the near term. Instead, SHIB may experience a period of measured volatility as market participants await clearer directional cues.

Source: CoinGlass

Technical Outlook: SHIB Faces Critical Demand Zone

SHIB is currently trading near $0.00001225, just above a historically significant demand zone at $0.00001028, which corresponds closely with the 1.0 Fibonacci retracement level. Technical indicators such as the Stochastic RSI show the asset is deeply oversold, suggesting potential for a short-term price rebound.

Nonetheless, bearish momentum remains strong. Failure to maintain support at this level could expose SHIB to further declines toward the 1.618 Fibonacci extension near $0.00000573. Therefore, while the demand zone offers a possible floor for price action, confirmation of a sustained reversal depends heavily on improving market sentiment and increased buying pressure.

Source: TradingView

Conclusion

Shiba Inu is at a pivotal juncture, balancing between a major demand zone and increasing bearish pressures from whale exits and rising short interest. The declining retail participation further complicates the outlook, suggesting that support levels could be fragile. Traders and investors should closely monitor buyer responses at current levels, as a successful rebound could provide short-term relief and trap bearish positions. Conversely, a decisive break below $0.00001028 may accelerate downward momentum toward deeper Fibonacci retracement levels. Maintaining vigilance and adapting to evolving market signals will be crucial for navigating SHIB’s near-term trajectory.