Shiba Inu Price Drops 10% As 5 Trillion SHIB Flood To Exchanges Following WazirX’s Exploit

WazirX, one of India’s largest cryptocurrency exchanges, suffered a security breach on Thursday that resulted in the loss of $230 million, nearly half of its reserves. The exchange referred to the incident as a “force majeure event.” However, the repercussions extend beyond WazirX alone, casting a shadow of uncertainty over Shiba Inu (SHIB) holders.

Blockchain analytics firm Elliptic analyzed the breach, revealing that approximately $235 million worth of various crypto assets were lost, including Shiba Inu ($96.7 million), Ethereum ($52.6 million), Polygon (MATIC) ($11 million), Pepe ($7.6 million), Tether’s USDT ($5.7 million), and Floki Inu (FLOKI) ($4.7 million).

As news of the breach spread, Julio Moreno, head of research at CryptoQuant, reported a surge in people rushing to exchanges to sell their assets. Notably, over 5 trillion SHIB tokens flooded exchanges within a few hours, intensifying concerns about a potential major sell-off wave.

The impact on Shiba Inu’s price was evident, with the token experiencing a sharp decline of nearly 10% following the exploit to its current trading price of $0.000017. 

It was also disclosed that The hacker responsible for the WazirX breach sold off $102.1 million worth of SHIB tokens, according to on-chain data firm Arkham, contributing to the downtrend. 

However, reports indicate that market makers such as Wintermute intervened by purchasing SHIB from decentralized exchanges (DEX) and selling it on centralized exchanges, mitigating a further price drop for the token.

In the future, the extent of the sell-off and its impact is a concern, as investors’ decisions to sell their holdings as panic mounts could further exacerbate the current downtrend. 

Examining the SHIB/USD daily chart reveals three significant support lines expected to impede further downward movement. The first and relatively less significant support is anticipated to be around the $0.000014 zone. This level previously marked the end of a correction in early July, followed by a recovery towards $0.000020.

Should selling pressure breach this level, attention turns to the crucial 6-month support at $0.000012. SHIB bulls must hold this level to prevent a deeper decline if significant buying pressure fails to materialize.

Lastly, the $0.0000092 mark represents the ultimate threshold for bullish investors in the Shiba Inu coin. A breach of this level would potentially trigger a revisit to the token’s all-time low levels.

Conversely, if SHIB experiences a recovery, the 200-day exponential moving average (EMA), depicted as the yellow line on the SHIB/USD chart, could act as a resistance point. This resistance will come into play if bullish sentiment controls SHIB’s price action.

Featured image from DALL-E, chart from TradingView.com