Shiba Inu (SHIB) has faced challenges in maintaining the level of liquidity it once enjoyed. The currency has shown minimal volatility in recent weeks, leaving many investors wondering about its future direction.
However, despite the apparent inactivity, several indicators point to the possibility of substantial price movement in the near future. As the path for SHIB seems somewhat constrained, this begs the question of where the coin is headed and what potential opportunities or hurdles lie ahead.
Shiba Inu (SHIB) Liquidity problems
During the peak of the 2021 bull market, Shiba Inu (SHIB) emerged as a prominent player, spearheading price rallies that attracted a lot of attention. As a result, ShibaSwap, the decentralized exchange associated with SHIB, experienced an increase in Total Value Locked (TVL), reaching an impressive $1.75 billion.
However, the previously rising TVL has taken a huge hit, falling to just $25.16 million, according to Defillama. At first glance, this dramatic fall in TVL may raise concerns about a possible liquidity crisis. Still, a closer examination suggests that this situation is temporary rather than a long-term predicament.
Recent data indicates a notable increase in SHIB purchases over different time frames, and a closer look at portfolio data shows a mixed picture, with some ranges showing an increase in holdings while others show a decline.
SHIB total market cap currently at $5.1 billion on the daily chart: TradingView.com
SHIB investors show confidence in long-term potential
After analyzing on-chain data, Sanitation map reveals a remarkable pattern among SHIB token holders. In particular, investors with SHIB holdings ranging from 1 to 1,000,000 tokens have shown a consistent increase in their balances. This upward trend suggests that a significant portion of the retail cohort has some faith in the long-term performance of this meme-inspired cryptocurrency.
Network usage data also points to a drop in daily transactionsfalling from an average of 7,000 to about 3,500. However, this does not necessarily indicate an imminent emergency. Instead, this could be part of a larger stabilization phase for the token as holders wait for a price recovery.
7/10 Network usage data is also worth noting: daily transactions have halved from an average of 7,000 to 3.5,000. This drop may indicate a decreased interest in #SHIBadds some weight to the theory of the liquidity crisis.
— U.Today (@Utoday_en) June 2, 2023
Given the current state of stagnant price and reduced volatility, it seems likely that SHIB is preparing for a significant price shift. This prospect has caught the attention of investors who are closely monitoring the market for future developments.
Source: Coingecko
The SHIB price up CoinGecko is currently $0.00000855, with a slight drop of 1.0% in the last 24 hours and a drop of 3.1% in the last seven days.
– Featured image from Perfect Dog Breeds
