By Victor Swaezy 
After weeks of sustained downward pressure, Shiba Inu has endured one of its sharpest sell-offs of the year. Price action has remained volatile, with SHIB breaking below a short-term consolidation range and extending its decline to fresh local lows.
The token continues to trade below key moving averages, reinforcing a technically bearish structure, while volume spikes during recent drops suggest sellers have largely controlled the market.
Exchange Outflows Hint at Changing Investor Behavior
Despite the weak price performance, on-chain data is beginning to show early signs of stabilization. Exchange netflow metrics reveal that approximately 207 billion SHIB tokens exited centralized exchanges over the past 24 hours.
Such large net outflows typically indicate that investors are moving assets into private wallets, reducing immediate sell-side pressure.
Historically, this behavior often marks a shift from panic-driven selling toward accumulation or longer-term holding, particularly when market participants perceive prices as discounted.
Liquidity Absorption Signals Potential Structural Shift
The decline in exchange reserves points to a gradual absorption of available liquidity. Rather than continued inflows driving additional selling, the data suggests that opportunistic buyers may be stepping in. This shift in market structure can reduce the intensity of sell pressure, even if prices remain under stress in the short term.
While this does not confirm a trend reversal, it does indicate that the most aggressive phase of distribution may be losing momentum.
Oversold Conditions Raise Prospects of Consolidation
From a technical standpoint, SHIB is now trading in oversold territory on several momentum indicators. In past market cycles, such conditions have often preceded relief rallies or, at minimum, periods of sideways consolidation as sellers begin to tire.
However, oversold signals alone are not enough to confirm a bullish reversal. Analysts note that SHIB is more likely to enter a consolidation phase before any meaningful recovery attempt, particularly if broader crypto market conditions remain uncertain.
Recovery Hinges on Key Resistance Levels
For Shiba Inu to regain bullish momentum, it will need to reclaim recently lost support zones and push back above major resistance levels. Continued exchange outflows and improving netflow dynamics could support such a move, provided overall market sentiment stabilizes.
For now, SHIB remains in challenging territory. Still, the combination of heavy token outflows, slowing sell pressure, and oversold technical conditions suggests that the market may be starting to find its footing after a punishing decline.