SHIB slides down - But on-chain data shows that a bounce back is near.

Shiba Inu (SHIB), one of the leading memecoins, has fallen 13% in value over the past 7 days amid a backdrop of widespread take profit activity and bearish sentiment.

However, while many traders are exiting their positions, some investors see this price drop as a strategic buying opportunity, which could help trigger the next upward momentum for this memecoin. But how?

SHIB whales and retail traders bet on the recovery

Data from the 1-day chart of SHIB/USD shows that this memecoin has been falling steadily since breaking the ascending parallel pattern on July 28, a signal indicating that buying power is weakening and selling pressure is prevailing.

The parallel increasing channel of SHIB | Source: TradingViewHowever, some investors see this falling trend as an accumulation opportunity. On-chain data from Nansen shows that whale wallets holding SHIB worth over 1 million USD have quietly bought in during the price drop, increasing total holdings by 4% in just the past 7 days.

The amount of SHIB held by whales | Source: NansenThe increasing accumulation by whales reflects long-term confidence in the value of SHIB, even as the price of this memecoin struggles in a volatile market. Furthermore, when whales buy in, retail investors often tend to follow suit.

Moreover, the increase in whale activity often drives retail investors to follow suit, and that is exactly what is happening. According to data from IntoTheBlock, the number of short-term holders extending their holding period has increased slightly by 1% over the past week.

SHIB holding address over time | Source: IntoTheBlockThis shows that investors holding SHIB for less than 30 days are confident in the growth momentum. It also improves the short-term outlook for SHIB as these holders respond better to price changes.

The fact that this group chooses to hold SHIB instead of selling is a good sign for price stability and short-term recovery of the memecoin.

The bulls target a breakout, but the bears are still lurking

As of now, SHIB is trading around $0.00001246. If the accumulation by whales continues and retail holders maintain their confidence, this memecoin could recover to the resistance level of $0.00001362 in the short term.

Technical analysis of SHIB | Source: TradingViewConversely, if pessimistic sentiment and take profit activity increase again, SHIB risks extending its fall and sliding down to $0.00001160.

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