Shiba Inu is nearing the "brink of life and death" – Buyers are "winding up" for the next explosion?

While Bitcoin continuously sets new historical highs, Shiba Inu (SHIB) is also not lagging behind, maintaining a steady growth trend. In line with the positive trend of the overall market, SHIB has recorded a 10% increase over the past 7 days, indicating that the appeal of this memecoin remains very strong.

The highlight is that SHIB has just broken through the symmetrical ascending triangle pattern, opening up the potential to continue climbing higher. However, on-chain data shows that two important indicators are sending conflicting signals, meaning that the price could fluctuate sharply in either direction depending on which side gains the upper hand.

Supply on the exchange decreases – Advantage tilts towards the buyers

One of the factors to monitor after the price breaks out of a bullish pattern is the reserves on exchanges, as this is the amount of tokens ready to be sold immediately.

According to the data, the SHIB balance on exchanges has decreased from 122.54 trillion tokens (31/7) to 121.31 trillion tokens (11/8) – equivalent to a decrease of nearly 1%. This trend indicates that selling pressure has eased, allowing buyers to maintain upward momentum.

In fact, after the supply on the exchange hit its lowest level of the month on August 11, SHIB's price surged significantly. A similar phenomenon also occurred on July 24 and August 6, when the supply decreased leading to a price increase.

The price of Shiba Inu and supply on the exchange decreased | Source: GlassnodeHowever, it should be noted that right after the price increase, the supply slightly increased compared to the August low. This means traders should closely monitor the SHIB balance on the exchange to timely identify the risk of a reversal.

Warning from Spent Coin Age Bands Index

In addition to the positive signals from supply, the Spent Coin Age Bands – an indicator measuring when old coins are moved – shows signs of caution. When this indicator rises, it often means that long-term investors are taking profits, thereby adding more supply to the market and creating downward price pressure.

In early August, this index increased again, reaching a level nearly equal to that of the period before the adjustment on July 24. Historical data shows that whenever Spent Coin Age Bands peak locally, the price of SHIB often experiences a correction immediately afterward. This is the risk that traders need to consider before increasing their positions.

The Spent Coin Age Bands index increases | Source: Santiment## Key price area: Balancing between expectations and risks

Currently, SHIB is trading around 0.0000136 USD, still maintaining the breakout signal of the symmetrical triangle pattern. If it surpasses 0.0000143 USD, the upward momentum could be reinforced and drive the price towards the next resistance levels at 0.0000146 USD and 0.0000151 USD. In the most optimistic scenario, the target of 0.0000159 USD is entirely feasible.

"On the contrary, the area of 0.0000131– 0.0000122 USD acts as the 'death boundary' of the upward trend. If the price breaks through this zone, the bears could quickly regain control, pushing SHIB into a deep correction and ending the current upward momentum.

SHIB Price Chart | Source: TradingViewAlthough the on-chain indicators are conflicting, the Bull-Bear Indicator leans towards the buying side, providing further basis for the possibility of a continued upward trend. However, investors should also monitor both the supply on the exchange and the age of the spent coins to make appropriate decisions.

Taylor