Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.
SHIB has finally broken above one of its most persistent technical barriers, strengthening the recovery structure on the daily chart.
However, rising exchange reserves and a positive netflow of nearly 200 billion SHIB could put the breakout under immediate pressure.
Shiba Inu overcomes the resistances
One of the most enduring technical obstacles on Shiba Inu's daily chart has finally been overcome, but on-chain exchange data indicates that the rally may now face significantly more selling pressure.
After a dramatic move from below $0.00000500, SHIB is currently trading around $0.00000609. The token's most recent gain significantly lifted it above its long-term moving average, which was close to $0.00000560 and had repeatedly thwarted attempts at recovery since August.
Technically, the breakout appears to be significant. SHIB has established a sequence of higher lows since its June bottom around $0.00000410, while its shorter moving averages have turned upward. More importantly, the latest move above $0.00000560 arrived alongside a noticeable expansion in trading volume.
However, exchange activity poses a risk. With a current value of about $533.2 million, SHIB's exchange reserve is nearly at the $534 million mark. The token-denominated reserve has increased by 0.22% in the last 24 hours to approximately 87.7 trillion SHIB.
Investors are selling
Meanwhile, total exchange inflows stand at approximately 477.5 billion SHIB, against roughly 286.4 billion SHIB in outflows. This results in a positive netflow of roughly 191.1 billion SHIB.
This is significant because positive exchange netflows typically indicate that more tokens are moving onto trading platforms than are leaving them. Although there is no assurance that those tokens will be sold immediately, it does increase the readily accessible supply just as SHIB is attempting to sustain a significant breakout.
Despite this, the technical structure remains far stronger than it was in September. The breakout would be maintained, and SHIB might be able to challenge the recent wick highs around $0.00000620–$0.00000630 if it holds above $0.00000560–$0.00000570. If that range is cleared, the route toward the May resistance zone, located between $0.00000650 and $0.00000670, would open up.
The bearish scenario begins if buyers fail to absorb the expanding exchange supply. A return below $0.00000560 would raise doubts about the breakout, while losing $0.00000520–$0.00000500 would seriously damage the current recovery structure.
As of right now, SHIB has made a significant technical breakthrough, but the first real test of whether buyers can sustain it comes as nearly half a trillion tokens move onto exchanges.
Arman Shirinyan
Dan Burgin
