- Shiba Inu’s exchange reserve has dropped to a two-year low.
- A drop in exchange reserve typically precedes a surge in price.
- SHIB’s exchange reserve drop seems well-timed for a potential upsurge.
According to a cryptocurrency analyst, Shiba Inu is set for a notable rally following its 2-year low exchange reserve output. In his latest post on X, the crypto analyst revealed that Shiba Inu’s exchange reserve has dropped to 84.55 trillion tokens, sparking fresh bullish momentum among the meme coin’s community.
How do exchange reserves affect crypto prices?
The analyst continued by explaining the potential effect of dropping exchange reserves on cryptocurrency prices. According to him, such a scenario suggests that users are withdrawing their crypto assets from exchanges and moving them into self-custody or staking programs. Technically, the shrinking supply of a particular crypto asset implies less pressure. Meanwhile, historical data show that drops in reserve precede accumulation waves.
Related: Shiba Inu Price Prediction: Analysts Track Resistance Flip Ahead Of October Volatility
In the meantime, the analyst noted that most Shiba Inu community members, including analysts from the broader crypto market, agree that Shiba Inu is deep into the accumulation zone. However, the current trend puts the cryptocurrency below a descending resistance level around $0.000011. Hence, a break above that level could initiate a rally and flip the cryptocurrency’s narrative into bullish sentiment.
Shiba Inu and the ‘Uptober’ effect
Shiba Inu’s exchange reserve dropped from around 190 trillion in January 2023 and has failed to recover such a volume since then. The metric declined steadily before reaching 140 trillion at the beginning of this year. A continuation of the drop in volume has seen SHIB exchange reserves slide to the current level indicated by the analyst.
The analyst believes Shiba Inu’s current bullish tendencies align with the traditional ‘Uptober’ phenomenon referenced across the cryptocurrency community. For context, cryptocurrency enthusiasts use the term to describe October, considering the month’s reputation for bullish momentum across the crypto market. Incidentally, Shiba Inu recorded its all-time high of $0.00008845 in October 2021.
TradingView’s data show that SHIB traded for $0.00001174 at the time of writing, following a 20% decline in the past two weeks.
Related: Shiba Inu Risks Grow as Leadership Wavers and Price Awaits Breakout
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
