Why Shiba Inu May Experience a ‘Messy June’

Shiba Inu (SHIB) started June with significant market movements that could signal a challenging month ahead. According to a recent analysis, several key factors suggest that SHIB’s price may face considerable downward pressure. These factors include a large influx of SHIB tokens to exchanges, declining network growth, and reduced demand, all contributing to a bearish outlook for the token.

Exchange Inflows and Selling Pressure

On June 1, approximately 2.6 trillion SHIB tokens were sent to exchanges, as indicated by the Exchange Net Position Change metric from Glassnode. A positive net position change typically indicates that more tokens are being deposited into exchanges than withdrawn. This influx usually leads to increased selling pressure, as more tokens available on exchanges can lead to higher sell orders, driving the price down.

Historically, when significant amounts of tokens are moved to exchanges, it often precedes a price decline. In this case, the substantial inflow of SHIB tokens suggests that holders may be preparing to sell, which could result in a further decrease in SHIB’s price.

Declining Network Growth

Network growth is a crucial metric for evaluating the health and adoption of a cryptocurrency. It measures the number of new addresses interacting with the token for the first time, indicating user adoption and network expansion. According to data from Santiment, Shiba Inu’s network growth has been declining since the peak it reached on May 29.

A drop in network growth suggests that fewer new users are entering the SHIB ecosystem, which could indicate waning interest and adoption. This decline reinforces the bearish sentiment around SHIB and suggests that the token could be set for a further price drop if this trend continues.

Reduced One-Day Circulation

Another metric highlighting potential issues for SHIB is the one-day circulation, which measures the number of tokens actively used in transactions within a 24-hour period. A high circulation number indicates strong user engagement and demand for the token. As of now, SHIB’s one-day circulation stands at 965.89 billion, indicating a decrease in transactional activity.

Lower circulation suggests that SHIB is not attracting as much liquidity as other top memecoins. This reduced activity can lead to lower market interest and, consequently, less price support. For SHIB to avoid a prolonged decline, its circulation must increase, reflecting higher demand and engagement from the market.

Price Outlook and Potential Scenarios

Given these metrics, SHIB’s price outlook for June appears challenging. If the current trends persist, the token’s price could fall to $0.000020, representing a significant decline from its current value of $0.000024. This scenario would likely be driven by continued selling pressure from the increased exchange inflows, declining network growth, and reduced transaction activity.

However, there remains a possibility for a price rally if market conditions improve and demand for SHIB increases. For a bullish reversal, SHIB would need to see a resurgence in network growth and transaction activity, indicating renewed interest and adoption. If these conditions are met, SHIB could potentially rally to $0.000030, but this would require substantial market support and positive sentiment.

Conclusion: Navigating SHIB’s Market Dynamics

Shiba Inu faces a potentially turbulent June, with several on-chain metrics indicating a bearish outlook. Increased exchange inflows, declining network growth, and reduced one-day circulation all contribute to a challenging environment for SHIB. Investors should closely monitor these metrics and broader market conditions to navigate the potential volatility effectively. Understanding these dynamics will be crucial for making informed decisions and managing risk in the evolving cryptocurrency market.