Even though retail traders are still glued to the tokens, it seems like the growing number of wallets have decreased their SHIB positions.
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Shiba Inu, the self-proclaimed killer of Dogecoin, still has a passionate following, but on Wednesday he was back in the red after three straight weeks of losses. The losses follow gains from large SHIB token holders as the crypto market shifts to a risk exclusion system, a situation where traders reduce their exposure to risky assets, according to blockchain data. “Crypto markets are currently in risk mitigation mode after Bitcoin and Ether hit new highs two weeks ago,” Blockchain analyst Nansen said in a written response to lower prices as investors reduce risk.
During press, SHIB was trading at $0.003700, down 11.89% over the past 24 hours, Messari said. According to Nansen, a growing number of portfolios with significant holdings have recently slashed their positions in SHIB, likely due to gains. Data from blockchain data company Santiment shows a similar trend. The so-called whale deals or the number of SHIB transactions worth more than $100,000 have been increasing since early November. Active deposits or the daily number of unique addresses for storing SHIBs on the central exchange are also increasing.
A spike in the active deposit metric could indicate increased near-term pressure to sell tokens, according to the Santiment metrics explanation. "Like any asset, the price of a SHIB is a product of supply and demand ... a larger percentage of SHIB buyers seem only attracted by its speculative appeal," said Rick Delaney, senior analyst at OKEx Insights. “Attracted by rising asset prices, many SHIB investors do not have the long-term confidence needed to maintain their positions or return to the market when prices fall.
Decrease in trading volume
While SHIB was once the most traded token on a centralized exchange, its trading volume has decreased significantly, according to CoinGecko. Nansen said trading volume is one of the most important indicators of SHIB and other meme tokens as the decline in trading volume indicates that investors are starting to lose interest and are becoming “more cautious” in investing in meme tokens.
The most common alternative cryptocurrencies (altcoins) traded on centralized exchanges now are gaming-related tokens, including decentralized land (MANA) and sandbox (SAND), according to CoinGecko. “The drop in SHIB prices could largely be due to the recent shift in investor interest from meme tokens to meta-universal projects,” wrote CoinMarektCap, a cryptocurrency tracking website, said. “This is easy to see if you compare MANA, SAND and SHIB trading volumes.
"Trading volume is always related to investor interest in a project," he added. Noise on social media about dog coins has also dropped dramatically. At the time of publication, Google Trends, a widely used tool for measuring trading interest in hot topics, was showing a score of 22 for the global search query "SHIB", up from a high of 100 in late October. A score of 100 represents the highest popularity - the maximum number of observed searches for a given word in a given time period. A value of 22 means fewer people are scanning the SHIB information network.
Also read: Shiba Inu team alerts SHIB investors about scam
A glimmer of hope
Despite the easing of the social media frenzy surrounding meme tokens, retail investor interest in SHIB remains strong as the number of unique addresses SHIB holds continues to grow – good news for SHIBArmy. The number of unique addresses held by SHIBs exceeded one million on November 11 - a time when SHIB prices had already fallen, according to Nansen. "Retail interest is definitely still there as people take speculative bets," said Daniel Hu, research analyst at Nansen. "[Nobody] wants to lose wealth."
