Shiba Inu (SHIB) is showing signs of weakness as its exchange reserves have plummeted to a historic low of 96.6 trillion. This marks a significant drop from earlier levels, with on-chain data revealing major shifts in investor behavior, particularly the movement of long-term holders (LTHs) away from exchanges. Additionally, the daily burn rate of SHIB has surged by 49,552%, with millions of tokens being permanently removed from circulation. These shifts may indicate that holders are opting for cold storage, possibly anticipating a long-term play for the token.

Decline in Exchange Reserves

According to CryptoQuant data, SHIB’s reserves on exchanges have dramatically decreased, falling from 135.4 trillion SHIB in January 2025 to 93.5 trillion SHIB. This sharp decline is evident when looking at historical trends. In April 2022, nearly 200 trillion SHIB, or almost half of the circulating supply, were held on exchanges. By February 2024, this figure had dropped to 165.8 trillion. The trend coincides with a significant price decline, as SHIB has lost over 60% of its value since December 2024, dropping from $0.0000329 to a recent low of $0.000013.

Exiting Long-Term Holders

Glassnode data also reveals a troubling trend among Shiba Inu’s long-term holders. In the 2021 batch, these holders accumulated over 20% of SHIB’s supply at low prices, but they began offloading their holdings at key price peaks, triggering sharp corrections in the market. As long-term holders and smaller retail investors exit, large holders or whales have increased their accumulation. Currently, five whales control 58.38% of SHIB’s circulating supply, holding a combined 574.83 trillion SHIB.

Surge in SHIB Burn Rate

Despite the decline in reserves on exchanges, Shiba Inu’s burn rate has seen a massive surge. In the past 24 hours, the burn rate increased by an extraordinary 49,552%, with 13.29 million SHIB permanently removed from circulation. One single whale burned 12.13 million SHIB in one transaction, contributing to the significant spike. Just days earlier, another major burn saw the destruction of 503.3 million SHIB, including 459.3 million SHIB in a single transfer. The growing burn rate is helping to reduce the circulating supply, which could lead to upward price pressure if demand continues.

Shift to Cold Storage

As SHIB’s reserves on exchanges continue to shrink, many holders appear to be moving their tokens to cold storage. Cold storage provides a more secure way of holding assets offline, and this shift could indicate that investors are preparing for long-term holdings and are less concerned with short-term market fluctuations. The combination of a decreasing supply and an increasing burn rate suggests that Shiba Inu holders are actively reducing the available supply while anticipating future price appreciation.

Market Outlook and Whale Movements

For Shiba Inu to see a potential recovery, monitoring the movements of whales is crucial. If the whales increase their holdings or more tokens are burned, it could signal that a market bottom is near. This could present an attractive opportunity for those looking to buy the dip. However, the future of SHIB largely depends on whether demand continues to grow, which could help support its long-term value despite the ongoing price pullback.

In summary, Shiba Inu’s exchange reserves have reached record lows, and the increased burn rate suggests a shift towards cold storage among holders. If demand persists and whales continue to accumulate, SHIB’s future could see potential for long-term growth, offering an interesting prospect for investors watching the market closely.