Shiba Inu’s price action in 2022 wasn’t something you, as an investor, would like to see. The devastation the token brought to investors led to numerous consequences for the small token, and a recovery seems unlikely. However, losing hope is not something you want to do while holding cryptocurrencies, especially when there are some possibilities that could lead to a reversal in 2023.
Healthy keeper composition
One of Shiba Inu’s biggest problems was the large number of speculative traders that pushed down the asset’s value each time SHIB went on the recovery course. With a high number of “free” tokens floating around, the selling pressure on Shiba Inu increased exponentially for almost no reason.
However, as the year progressed, the majority of short-term holders left the network, leaving only dedicated investors and traders to hold the token, which could become the game-changer in 2023.
New inflows
After the FTX implosion, Terra crash, and other industry events, institutional investors exited the cryptocurrency market for good in the face of a lack of regulation and the unclear future of the entire market.
Source: TradingView
Fortunately, the situation may change in the new year as financial regulators are actively working on new guidelines for the cryptocurrency industry. With the new wave of institutional assets, tokens like Shiba Inu could join the market-wide rally.
Oversold to the ground
It’s no secret that Shiba Inu is one of the most actively sold assets in the market, with the majority of traders and investors shorting the token with everything they have. In retrospect, betting on the token’s demise was a wise decision.
However, we could see the opposite effect of these actions once most of the existing short selling volume is absorbed by a large buying volume, leading to a short squeeze and subsequent recovery rally.