Shiba Inu (SHIB) had faced a retracement from its recent high, dumping by as much as 42% in a few hours due to multiple factors such as market dynamics.
The broader crypto market is facing a major correction that has sent prices below major support levels. Shiba Inu has not escaped the onslaught, being one of the most impacted crypto assets in the market, with the token erasing some of the gains of the previous day.
Notably, Shiba Inu initially surged to a high of $0.00004567 yesterday as the market run gained considerable steam. The asset had breached several resistance points, with its sights set on the much-coveted $0.0001 price territory.
Exchange Inflows
However, the bears stationed a formidable roadblock to the uptrend yesterday, with multiple factors contributing to a major dip in Shiba Inu’s price. One of these factors is a sustained selling pressure emanating from massive inflows to exchanges.
Investors often move their assets from cold wallets to exchanges when there’s an intent to sell. As a result, such developments, especially the ones involving whale transactions, typically trigger concerns of large-scale dumps among market participants.
Yesterday, the Shiba Inu market observed two of these large whale exchange inflows. The first transaction, spotlighted by whale-tracking resource Whale Alert, saw the movement of 183,073,161,874 (183 billion) SHIB worth $5.55 million at the time to Binance.
🚨 183,073,161,874 #SHIB (5,550,168 USD) transferred from #Wintermute to #Binancehttps://t.co/h1nCmnmH64
— Whale Alert (@whale_alert) March 5, 2024
Despite the general consensus surrounding movements to exchanges, the fund flow from Wintermute to Binance could be for several possible reasons, including a shift in investment strategy, profit-taking, or a reallocation of funds based on market conditions.
The second transaction involved a much larger sum, with Whale Alert highlighting the movement of 1,450,254,597,018 (1.45 trillion) SHIB between two unknown wallets. However, on-chain data confirms that the recipient wallet is a Coinbase address.
Notably, the sending address first procured the SHIB tokens in multiple transactions from September 2021 to November 2022, withdrawing the assets from a Coinbase address within this timeframe. The wallet has now sent all the assets to Coinbase after HODLing for over two years.
🚨 🚨 🚨 1,450,254,597,018 #SHIB (54,846,453 USD) transferred from unknown wallet to unknown wallethttps://t.co/FqyRh7QKL9
— Whale Alert (@whale_alert) March 5, 2024
Shiba Inu Suffers Market Impact
These movements into exchanges triggered investor angst, as concerns of growing selling pressure mounted. The second factor that contributed to the recent Shiba Inu collapse was the broader crypto market retracement triggered by Bitcoin (BTC) after it breached its ATH.
BTC soared to a high of $69,000 yesterday on Binance, breaching its previous ATH price. Following this surge, the token recorded a significant dump, collapsing by a massive 14.48% to a low of $59,005, as it dropped below the $60,000 mark.
Being the premier crypto token, Bitcoin brought the entire market down with it, and SHIB felt the impact, dropping by 42% yesterday to a low of $0.00002555. The confluence of the mounting selling pressure and Bitcoin’s impact contributed to this massive Shiba Inu slump.
However, the asset has now recovered most of the losses of the previous day. SHIB has gained 10.79% today, but it is still battling to recover the $0.00004 territory, currently changing hands at $0.00003901 as of press time.
