Shiba Inu exchange reserves near $300 million low, risk further drop

Shiba Inu’s value held on cryptocurrency exchanges has declined sharply, approaching a four-year low. CryptoQuant, an on-chain analytics provider, reported that the total value of SHIB tokens on exchanges dropped to $331.96 million, reflecting a daily decrease of 6.81%.

Fall in SHIB reserves and thin liquidity

Despite this notable decline in market value, the reserves themselves have not seen a significant outflow. Only 0.05% of SHIB tokens exited exchanges in the last day, with approximately 86 trillion tokens still held across centralized trading platforms. This suggests that the recent downturn is primarily driven by price depreciation rather than large-scale withdrawals by holders.

At the current price, the $332 million figure represents the total supply available for sale on exchanges, although analysts cautioned that if a substantial sell-off occurred, the resulting realized value could be much lower due to thin order book depth. A full liquidation of the 86 trillion SHIB held on exchanges would likely drive the price substantially below current levels, reducing the proceeds from such a sale to potentially a third of the existing valuation.

Thin liquidity remains a concern for SHIB, especially since most tokens are held by retail investors rather than large institutional players.

Compared to other digital assets, SHIB’s liquidity appears shallow, which can amplify volatility during sharp market moves. Most holders are individual investors, contributing to the relatively limited institutional involvement in the asset.

Recent price performance and market dynamics

Recent data also shows that the net flow of SHIB remains negative, with about 45.9 billion tokens leaving exchanges over the past 24 hours. This activity is attributed to routine trading, as investors continue to move assets into personal wallets or sell them in response to overall bearish sentiment in the broader crypto market.

SHIB’s price action offers little optimism in the short term. The token recently lost support at $0.000004 and briefly stabilized, although the rebound was not supported by any notable increase in trading volume or momentum. The current uptick appears driven primarily by the oversold technical condition of SHIB, as indicated by the Relative Strength Index (RSI) dropping below 30, rather than any fundamental change in demand.

Unlike some assets that mirror Bitcoin’s movements, Shiba Inu’s recent performance aligns more closely with other smaller-cap altcoins, many of which are also experiencing oversold conditions and heightened volatility.

On November 14, SHIB’s price touched $0.0000037, falling below its July low point of $0.00000413. The decline in reserves signals a potential breach of the $300 million threshold if the token’s price drops to $0.0000035, which is around 11% below the latest trading value of $0.00000394.

The prospect of reserves dipping beneath this psychological support level could increase price pressure further if sentiment does not stabilize in the coming days.