The memecoin Shiba Inu (SHIB) has seen a significant price surge in recent weeks. Trading at $0.000017 at press time, SHIB has gained 32% in the past month. On-chain data indicates that this growth has been largely driven by increased positions and reduced selling activity among short-term holders (STHs).

However, the sustainability of this appreciation remains uncertain. STHs are known to sell off quickly when market conditions change, raising concerns about how long this upward trend can last.

This analysis examines the potential for continued gains, considering the historically volatile behavior of this group of investors.

Short-term Shiba Inu holders will be decisive

Shiba Inu STHs are investors who have held their coins for less than a month. An assessment of their holdings indicates that their balance has increased by 20% in the last 30 days.

When this occurs, it indicates that many market participants with short-term investment objectives have increased their positions. These traders hold a significant portion of the circulating supply of any asset, so their buying activity often results in an appreciation in the asset's price.

Read more: Best exchanges to buy Shiba Inu (SHIB)

Additionally, SHIB’s positive daily active address (DAA) divergence confirms the increased demand for altcoins in recent weeks. This indicator, which measures an asset’s price movements with changes in its number of daily active addresses, currently stands at 15.97%.

A price appreciation accompanied by a positive DAA price divergence is a bullish signal, suggesting growing interest and potential for further price appreciation.

Shiba Inu Balance by Ownership Time. Source: IntoTheBlock

On the other hand, BeinCrypto’s assessment of SHIB long-term holders’ (LTHs) activity reveals that they have taken a different approach. Over the past month, their coin holdings have reduced by 0.35%. This indicates that this group of investors has recently been distributing their SHIB coins to take profits.

Shiba Inu Daily Active Price Divergence. Source: Santiment

SHIB Price Prediction

While SHIB’s STH activity has driven its price up by double digits over the past month, it does pose a risk to the coin. This group of investors is often quicker to react to sudden market fluctuations and can quickly sell their positions if the price moves unfavorably.

Therefore, if these investors start selling, the SHIB price could lose some of its recent gains and fall towards the support at $0.000012. If this level fails to hold, the memecoin’s price could plummet to its August 5 low of $0.000010.

Read more: 6 Best Platforms to Buy Shiba Inu (SHIB) in 2024

However, if SHIB LTHs’ sentiment changes and they start accumulating more coins than they sell, the altcoin’s value could rise to $0.000028.

Shiba Inu Price Analysis. Source: TradingView

The article Shiba Inu Targets $0.000028 With Support From Short-Term Holders appeared first on BeInCrypto.