Shiba Inu could dip 7% as SHIB whales reduce their holdings

Shiba Inu (SHIB), the second largest meme coin in the crypto ecosystem, edges slightly higher and trades at $0.00001710 at the time of writing on Thursday after a three-day decline. On-chain and technical indicators signal that further correction is likely in the meme coin. 

SHIB could sweep liquidity at $0.00001576, the August 5 low for the meme coin. 

Shiba Inu could correct for these reasons

Shiba Inu’s large wallet investors holding between 100 million and 1 billion SHIB tokens have shed their holdings between September 10 and October 10. In the last 30 days, there has been a consistent decline in SHIB holdings of different cohorts of holders. 

Retail investors holding small quantities continued their accumulation in the same timeframe, according to Santiment data. 

Shiba Inu holdings of different wallet addresses

Typically, a decline in holdings of large wallet investors is considered bearish for an asset. 

Shiba Inu could correct 7%

Shiba Inu broke above its multi-month downward trend on September 12, as seen in the SHIB/USDT daily chart below. The meme coin could sweep liquidity at the lower boundary of the Fair Value Gap (FVG) between $0.00001576 and $0.00001855. 

The decline marks a 7.83% loss from the current level of $0.00001710. Further down, SHIB could find support at $0.00001078, the August 5 low, if the decline is extended. 

The Moving Average Convergence/Divergence (MACD) indicator flashes red histogram bars under the neutral line, signaling a negative underlying momentum in the SHIB price trend.

SHIB/USDT daily chart

A daily candlestick close above the upper boundary of the FVG at $0.00001855 could invalidate the bearish thesis. In that case, Shiba Inu could target a return to the September 27 high of $0.00002169.