NOIDA (CoinChapter.com) — Shiba Inu (SHIB) price rally stalled after reaching its highest level since Dec. 2021 on March 5, as bears started ravaging the crypto market. However, on-chain data suggests traders remained bullish on the token’s future price action.
Over the past 24 hours, the crypto market cap has dropped by nearly 3%, erasing nearly $70 billion from the market. Memecoins like Pepe, Dogwifhat, Floki, etc., lead the sell-off, leading many to wonder if the memecoin season had come to an end.
On-Chain Data Raises Hopes For Shiba Inu Bulls
On-chain data shows a 602% spike in large SHIB holders’ net flows, which suggests whales accumulating tokens. Interestingly, the spike in accumulation coincided with the drop in Shiba Inu prices, suggesting traders were buying the dips.
The SHIB exchange reserves have dropped in tandem with the token’s prices, re-enforcing the narrative that traders are buying the dip. Moreover, exchange inflows have also dropped, which indicates that traders are not sending their SHIB tokens to exchanges.
A decline in exchange reserves or inflows suggests that the general market sentiment is one of hodling. Traders are likely moving their SHIB tokens to private wallets. As such, market participants are optimistic of the memecoin‘s price action.
SHIB Support A Little Shaky
One reason the SHIB price failed to hold above the $0.000025 and $0.000026 support zone was that nearly 9,100 addresses bought 2.57 trillion tokens in that range, per SHIB on-chain data from IntoTheBlock.
As such, when the SHIB price reached the support level, several traders panicked and started to book profits.
SHIB price dropped over 21% on March 16 to reach a daily low near $0.000024 before bulls recovered some of the ground. If the downtrend continues, SHIB price might drop to the 0.382 FIB support level near $0.000023.
The $0.000023 to $0.000019 price range has over 86,400 addresses that bought a combined 86 trillion tokens approximately. A drop to this support level could dramatically increase the selling pressure against SHIB prices, forcing the Shiba Inu token price to test the support near $0.0000173.
Conversely, a rally would see SHIB price facing resistance near $0.000031. Moreover, on-chain indicators could attract buyers to the market, pushing the Shiba Inu token price to the resistance near $0.000037 before paring gains.
The RSI for SHIB remained neutral, clocking at 51.08 on the daily charts.
