Shiba Inu (SHIB) price crossed the $0.000095 milestone for the first time since May 2023. The price bounce came after Binance announced SHIB as an approved collateral asset for loans on the exchange. A critical on-chain indicator suggests that SHIB could be at risk of an untimely price correction.
On Aug 4, the Binance exchange released an official statement announcing SHIB and seven other altcoins as approved collateral assets. This move will allow Shiba Inu holders to deposit SHIB as collateral to obtain “Flexible Loans” on Binance.
The markets have reacted positively to the news. Within 24 hours, SHIB’s price climbed over 12% to hit a 3-month peak of $0.0000098. However, a critical on-chain indicator flashes red signals that could truncate the ongoing price rally.
Binance Collateral Approval Has Reignited SHIB Trading Volume
Heading into August, Shiba Inu Trade Volume cooled off after successful Shibarium product updates have set the ecosystem alight in recent weeks. However, once Binance announced SHIB as an approved collateral asset, network activity picked up again.
Indicatively, SHIB Tokens Transferred stood at 2.4 trillion on Aug 2, down 66% from the 7.03 trillion volume recorded five days earlier.
However, as markets reacted to the Binance announcement, Shiba Inu promptly regained traction. As depicted in the chart below, at the close of Aug 4, the daily Tokens Transferred climbed 41% to hit 4.1 trillion SHIB.
Tokens Transferred measures changes in the overall transactional activity on a blockchain network. It is derived by tracking the daily number of tokens transacted among holders.
A spike in Token Transferred is a bullish indicator signaling a growing market demand for SHIB. This could potentially propel SHIB price to $0.00001 in the coming days.
However, there’s a risk that the bulls could be stopped dead in their tracks.
Strategic Traders are Piling Up SHIB Sell Orders
Binance approving SHIB as a collateral asset has triggered a bullish market reaction. But, some strategic traders appear to be seeking out short-term profit opportunities behind the scenes.
In confirmation of this, IntoTheBlock’s Exchange On-chain Market Depth chart shows that the Shiba Inu bears have started mounting sell-walls.
As illustrated below, the bears have placed active orders to sell 1.5 trillion SHIB tokens. Worryingly, this has already outpaced 1.4 trillion SHIB purchase orders from buyers.
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The Exchange On-chain Market Depth shows the current price distribution of aggregate buy and sell orders that traders have recently placed across recognized crypto exchanges.
As seen above, the bears could potentially offload a large volume of SHIB once the ongoing rally hits a euphoric top.
In conclusion, the SHIB price momentum is still currently largely bullish. However, strategic investors will apply conservative stop-losses to mitigate a potential flash price correction.
SHIB Price Prediction: Potential Correction From $0.000011
According to IntoTheBlock’s IOMAP data, SHIB could have some difficulty breaking above the $0.000011 resistance.
This further confirms the prediction that despite the bullish Binance announcement, traders looking to book profits could trigger an early reversal.
As seen below, 318,950 addresses holding 243 trillion SHIB tokens at the average price of $0.000011 could prevent a bullish breakout. But if that resistance level caves, SHIB could rally toward $0.000014.
In contrast, the bears will look to force a downswing below the $0.000008 support territory. As depicted above, 53,000 holders that bought 28.4 trillion SHIB tokens at the minimum price of $0.000008 could prevent further downside.
If that resistance gives way, the buy-wall at $0.000006 could be the next significant price target.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
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