LUCKNOW (CoinChapter.com) — Shiba Inu has seen a decrease in supply on cryptocurrency exchanges during the past month — hinting at the potential for price gains ahead. According to data from analytics firm Santiment, the supply of Shiba Inu tokens on exchanges fell by 0.51% since November 12th, now at 7.85% of the total supply.
When the supply of an asset on exchanges declines, it typically signals reduced selling pressure. Recently, data has shown large spikes in SHIB outflows from exchanges, draining exchange reserves and likely supporting SHIB’s price gains.
The decreasing exchange supply comes as the network underpinning the Shiba Inu token, called Shibarium, has recorded surging transaction levels after its mainnet launch four months ago. On Monday, Shibarium saw 7.84 million transactions taking place. The total transaction count is 93.6 million since launch, alongside 2.08 million total blocks mined. Currently, the network holds 1.3 million active wallets.
Cryptocurrency trader @trader_kamikaze highlighted this trend on Twitter. It argued that less token supply on exchanges generally means reduced selling pressure. This indicates that Shiba Inu holders have been withdrawing their tokens from exchanges and holding them in personal wallets. It indicates that SHIB is setting the stage for potential price gain.
On-Chain Metrics Indicate a Bullish Outlook for Shiba Inu
SHIB accumulation also looks positive based on holders’ increasing positions last month across multiple cohorts. Santiment data indicates SHIB holders with balances from 10,000 to 100 million tokens grew their overall holdings behavior is generally seen as bullish. Paired with shrinking exchange supply, this accumulation signals further near-term price increases that may be ahead for the meme coin.
Additionally, Network Growth, a metric tracking SHIB’s relevance and adoption amongst traders, aligns with the coin’s 30-day price appreciation. There is no divergence between price action and Network Growth, meaning this on-chain indicator corroborates and supports SHIB’s ongoing recovery trend.
In other positive news for Shib holders, over 2.7 million SHIB tokens were permanently burned in the last 24 hours, according to data from Shibburn. This burn rate represented an increase of more than 50% day-over-day. When burned, coins are permanently removed from circulation, increasing the scarcity of the remaining supply.
Despite Short-Term Dip, Conditions Favor Future Gains
At press time, SHIB was trading down around 2.41% over the past 24 hours for $0.0000093, according to CoinMarketCap.
However, if the exchange supply continues falling alongside high burn rates, the stage is set for Shiba Inu to post strong gains in the periods ahead.
