Despite facing a challenging period with declining prices, Shiba Inu (SHIB) continues to have a strong foundation of long-term holders. Recent data reveals that 78% of SHIB holders are sticking with their investments, maintaining their positions for more than a year. While a significant portion of investors is currently facing losses, the resilience of these long-term holders speaks to the underlying belief in Shiba Inu’s future potential.

Shiba Inu Faces Losses but Long-Term Holders Persist

According to data from IntoTheBlock, 59% of Shiba Inu holders are “out of the money,” meaning they are holding SHIB tokens at a price higher than its current market value. Only 37% of holders are in profit, while just 4% are breaking even. These figures highlight the tough situation for many SHIB investors, especially considering the massive gains the token saw in 2021.

At the time of writing, the price of SHIB is $0.000013, a decrease of 0.71% in the past 24 hours. Trading volume has also declined by 2.61%, now sitting at $133.6 million. These figures point to a cooling off of interest in the token, with fewer people actively buying and selling SHIB compared to previous months.

Decline in Trading Activity and Community Engagement

The decline in trading activity is further emphasized by a drop in community engagement. Over the past week, the Shiba Inu Telegram membership decreased by 0.38%, indicating a drop in investor interest and activity surrounding the project. This could suggest that some holders may be losing confidence or are simply waiting for a more favorable market environment.

However, despite this decline in short-term activity, the fact that 78% of SHIB holders continue to hold their tokens for over a year signals that a significant portion of the community still believes in Shiba Inu’s long-term value. This commitment is vital for the token’s ability to weather the current market downturn and potentially recover when conditions improve.

Cooling Interest from New Investors

Another noteworthy trend is the decline in new investor interest. In the past month, only 2% of SHIB holders have entered the market, signaling that new capital is not flowing into the token as it once did. This cooling off is indicative of a broader slowdown in retail activity, which is typical when a market experiences a downturn. The lack of new investors could make it more difficult for Shiba Inu to regain upward momentum unless there is a shift in the market or a new catalyst that fuels renewed interest.

Institutional Interest Remains Strong

Despite the decline in retail activity, Shiba Inu continues to show strong institutional interest. The data reveals that SHIB’s large transaction volume reached $184.96 million over the past week, indicating that high-net-worth individuals and institutional players are still active in the market. This could mean that Shiba Inu is still seen as an attractive asset for investors with a long-term outlook or those seeking to diversify their portfolios.

Moreover, SHIB has shown a strong correlation with Bitcoin, with a correlation score of 0.84 out of 1.0. This suggests that the price of Shiba Inu moves in tandem with Bitcoin’s price fluctuations, both up and down. If Bitcoin begins to see a sustained recovery, Shiba Inu’s price could follow suit, benefiting from the overall positive sentiment in the broader cryptocurrency market.

Looking Ahead: What’s Next for Shiba Inu?

While the short-term outlook for Shiba Inu may appear uncertain due to the decline in trading volume and community engagement, its long-term prospects remain tied to the broader cryptocurrency market. The continued institutional interest in SHIB, coupled with the strong commitment of long-term holders, offers a foundation for potential future gains.

In the coming months, Shiba Inu’s price movement will likely depend on a variety of factors, including the broader market’s recovery, adoption within the Shiba Inu ecosystem, and any developments that could help decouple the token from its current correlation with Bitcoin. If Shiba Inu can maintain its strong institutional interest and attract more retail investors, it could position itself for future growth once market conditions improve.

Conclusion

Despite the current dip in price and cooling retail interest, Shiba Inu remains a token with significant long-term backing. The fact that 78% of holders are staying loyal through this downturn speaks volumes about the community’s belief in the token’s potential. With institutional interest still strong and the possibility of a market recovery on the horizon, Shiba Inu may well see renewed interest and an eventual price rebound, making it one to watch in the coming months.