Shiba Inu’s (SHIB) exchange reserves have fallen to their lowest level in years. The current reserve balance across all major exchanges sits near 96 trillion SHIB, a sharp drop from the 180 trillion seen in early 2024. This drastic reduction signals that fewer tokens are now available for instant trading, which could tighten supply and potentially push prices higher if demand picks up.
Exchange reserves track the amount of cryptocurrency held on centralized exchanges. These tokens are typically available for immediate buying or selling. A drop in reserves usually means more tokens are being moved to private wallets, suggesting that holders prefer to keep SHIB off exchanges. This can indicate long-term holding behavior or preparation for staking, burning, or other utility-driven activity.
Throughout 2025, the decline in Shiba Inu exchange reserves has been steady. But in recent weeks, the drop has accelerated. This coincides with increased market interest, as prices briefly rose to $0.000017 earlier in May before pulling back to the $0.000015 range.
This reduction in supply is supported by SHIB’s netflow data, which shows persistent negative flow—more tokens leaving exchanges than entering.
One major spike showed more than 20 trillion SHIB leaving exchanges in a single move. These outflows are usually seen as bullish, as they remove tokens from the open market.
Is a Supply Shock Coming?
A supply shock occurs when available supply suddenly becomes limited while demand remains the same or increases. With SHIB’s exchange balances dropping and no significant rise in new supply, the stage is being set for such a scenario. If demand increases—perhaps triggered by a burn event, major news, or broader altcoin rally—prices could rise quickly due to limited sell-side liquidity.
However, for now, on-chain activity does not show a surge in demand. Active addresses and transaction counts remain flat, suggesting that retail engagement is low. Without strong demand, low supply alone may not be enough to trigger a sharp rally.
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Derivatives and Sentiment: What Do They Say About Shiba Inu?
Futures data offers a mixed picture. SHIB’s open interest remains steady, and funding rates are near neutral. This shows that leverage traders are cautious and not heavily betting in either direction. Additionally, recent liquidations were minor, which means no major short squeeze or panic buying has occurred yet.
This cautious stance among traders aligns with the flat RSI and weakening momentum on the 4-hour chart. The Relative Strength Index is hovering around 44, below the 50 neutral mark, signaling mild bearish momentum.
Shiba Inu’s Market Value to Realized Value (MVRV) ratio stands at 0.81, based on data from IntoTheBlock. This means most holders are still in a loss. Historically, an MVRV below 1 often indicates undervaluation. If sentiment shifts and demand picks up, this could give bulls a reason to buy, especially with supply drying up on exchanges.
Technical Indicators Signal Short-Term Weakness
SHIB is currently trading within a descending triangle pattern, which typically signals bearish continuation unless broken to the upside.
At the time of writing, SHIB is trading just below the 20 EMA ($0.00001535) and 50 EMA ($0.00001516), both of which are sloping downward. This alignment reflects short-term bearish pressure. However, the token still holds above its 100 EMA ($0.00001459) and 200 EMA ($0.00001395), indicating that the broader bullish trend has not yet been broken.
The Relative Strength Index (RSI) sits at 44.50, showing a lack of strong momentum. It remains below the neutral 50 level, indicating that sellers currently have a slight edge. Still, RSI is trying to stabilize, and a move above 50 would signal a possible shift in trend.
This setup creates a tight squeeze between declining resistance and flat support. A break below $0.00001500 could push SHIB toward the 100 EMA around $0.00001460, and possibly toward $0.00001400 near the 200 EMA. Conversely, if bulls manage to reclaim the 20 EMA and push above the descending trendline, SHIB could attempt a breakout toward $0.00001600 and above.
