Shiba Inu (SHIB) is at risk of significant selling pressure thanks to the bankrupt crypto firm Genesis Trading. This comes amid a spike in large transactions for the meme coin, which is undoubtedly a bullish development.
How Shiba Inu Could Face Significant Selling Pressure
Data from the on-chain analytics platform Arkham Intelligence shows that Genesis Trading owns 21.9 billion Shiba Inu tokens. This means the meme coin could face significant selling pressure as the bankrupt crypto firm looks to repay its creditors. Genesis has already finalized its restructuring plan and has begun making repayments.
On-chain data shows that Genesis has already been busy this week, moving some of its Bitcoin and Ethereum holdings as it looks to repay customers. The bankrupt crypto lender is expected to move its SHIB holdings at some point as part of the repayment process. However, in the end, whether or not Shiba Inu will face the dump of these 21.9 billion tokens will depend on the creditors themselves, as Genesis will be paying most of the claims in kind.
These creditors might choose to hold their tokens rather than immediately sell them on the market. However, if they decide to offload their tokens, there is no reason to believe that Shiba Inu whales will help weather this supply shock. These whales look to have regained their confidence in the second-largest meme coin by market cap and are accumulating again.
This is based on the recent spike in Shiba Inu large transactions involving amounts larger than $100,000. Data from the market intelligence platform IntoTheBlock shows that these whales traded 9 trillion Shiba Inu tokens on August 5, a 588% spike from the previous day when 1.53 trillion SHIB tokens were traded.
Meanwhile, over 3 trillion Shiba Inu tokens have been traded in the last 24 hours. As such, it is evident that these whales can help mitigate the impact of any sell pressure if Genesis Trading’s 21.9 billion tokens were to hit the market.
SHIBMaking Impressive Recovery
Shiba Inu has made an impressive recovery, having almost dropped below the crucial support of $0.00001 during the recent downtrend that plagued the broader crypto market. The meme coin is again looking to reclaim the support zone at $0.00002 and should be successful if the crypto market doesn’t witness another negative event from the macro side, sending prices tumbling again.
Crypto analyst Armando Pantoja recently mentioned that Shiba Inu is about to “explode” past its macro resistance with a bullish RSI divergence. He added that the correction is over, and the meme coin is in the “prime buying range.” He asserted that Shiba Inu is still going to $0.001.
At the time of writing, Shiba Inu is trading at around $0.00001373, down in the last 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com
