Shiba Inu Drops 20% After Short Lived Rally

Shiba Inu recently gave traders a thrilling weekend by surging 35% to reach a two month high. The sudden price jump came as a major whale started buying again after months of silence, alongside a pickup in the token burn rate. Unfortunately for late buyers, the momentum faded fast. Prices dropped by nearly 20% from the recent peak, leaving many retail traders underwater.

Analytics data shows that large holders used the price strength to take profits and exit their positions. Everyday investors rushed in near the top to chase the hype, which gave whales the liquidity they needed. Meanwhile, exchange reserves climbed to a two week high of 86.7 trillion tokens, pointing to growing selling pressure as more people move their coins to trading platforms.

Adding to the cautious mood, activity on the Shibarium layer 2 network remains quiet following last year's security exploit. With the wider crypto market turning red, SHIB might face more downside in the short term. Market watchers suggest waiting until crowd panic sets in before looking for a safer entry point.