Shiba Inu (SHIB) has experienced a significant price bounce, crossing the $0.000095 milestone for the first time since May 2023. The surge came in response to Binance’s announcement of SHIB as an approved collateral asset for obtaining “Flexible Loans” on their exchange. While this news has ignited positive reactions in the market, a critical on-chain indicator hints at a possible untimely price correction.
Binance Collateral Approval Fuels SHIB Price Rally
On August 4th, Binance made a noteworthy move by adding SHIB and seven other altcoins to its list of approved collateral assets. This development allowed Shiba Inu holders to deposit their SHIB tokens as collateral, facilitating access to flexible loans on the exchange. Following this announcement, SHIB’s price surged by over 12% within 24 hours, reaching a three-month high of $0.0000098.
The on-chain indicator, Tokens Transferred, which measures overall transactional activity on the SHIB network, reflected the market’s enthusiasm. After a decline in SHIB Tokens Transferred leading up to August, the announcement rejuvenated network activity, with daily Tokens Transferred rising by 41% to reach 4.1 trillion SHIB.
The Potential Risk of a Price Correction
Despite the bullish momentum, strategic traders have been observed piling up SHIB sell orders, signaling potential short-term profit-taking intentions. The Exchange On-chain Market Depth chart by IntoTheBlock shows the presence of active sell orders for 1.5 trillion SHIB tokens, outnumbering purchase orders by buyers (1.4 trillion SHIB).
This suggests that once the current price rally reaches a euphoric peak, the bears could offload a substantial volume of SHIB, potentially leading to a price correction.
SHIB Price Prediction: Potential Correction from $0.000011
IntoTheBlock’s IOMAP data indicates that SHIB might encounter resistance at the $0.000011 level. This resistance level is bolstered by 318,950 addresses holding 243 trillion SHIB tokens at an average price of $0.000011.
If SHIB successfully breaks above this resistance, it could rally towards $0.000014. However, traders seeking to book profits may initiate an early reversal, leading to potential downside pressure.
On the other hand, if the bears gain control, a downswing below the $0.000008 support territory could be on the horizon. There are 53,000 holders who purchased 28.4 trillion SHIB tokens at the minimum price of $0.000008, acting as a significant support level.
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Conclusion
The recent surge in Shiba Inu (SHIB) price, driven by Binance’s approval of SHIB as collateral for loans, has sparked optimism among investors. However, caution is advised, as on-chain indicators signal the possibility of a potential price correction due to strategic traders’ actions.
Traders are closely monitoring the resistance at $0.000011 and the support at $0.000008. A successful breakout above the resistance could fuel further gains, while a reversal below the support may lead to downside pressure. As the market dynamics continue to evolve, investors should remain vigilant and consider conservative stop-loss measures to manage potential risks associated with the ongoing SHIB price rally.
