Shiba Inu (SHIB) Might Rally in 2023, Here Are 3 Scenarios

Shiba Inu’s price performance throughout 2022 was not something you would like to see as an investor. The devastation the token brought to investors led to numerous consequences for the small token, and recovery seems unlikely. However, losing hope is not something you would like to do while holding cryptocurrencies, especially if there are some possibilities that may lead to a reversal in 2023.

Healthy holder composition

One of Shiba Inu’s biggest problems was the large number of speculative traders who pushed the asset’s value down every time SHIB took the recovery course. With a high number of “free” tokens in circulation, the selling pressure on Shiba Inu was exponentially rising for almost no reason.

However, throughout the year, the majority of short-term holders left the network with only dedicated investors and traders left to hold the token, which might become the deciding factor in 2023.

New inflows

After the FTX implosion, the Terra crash and other happenings in the industry, institutional investors left the cryptocurrency market for good, considering the lack of regulations and the unclear future of the whole market.

Luckily, 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 might join the market-wide rally.

Oversold to ground

It is not a secret that Shiba Inu has been one of the most actively sold assets on the market, with the majority of traders and investors shorting the token with everything they have. In retrospect, it was a wise decision to bet on the decline of the token.

However, we might see the opposite effect of those actions as soon as most of the existing shorting volume is absorbed by large buying volume, which would cause a short squeeze and a following recovery rally.