The price of the leading Shiba Inu coin has fallen by more than 10% over the past week. On-chain data suggests that this double-digit price drop has made the meme asset undervalued, presenting a buying opportunity for investors looking to trade against the market.
However, the persistent bearish sentiment towards SHIB suggests this could delay potential rallies.
Shiba Inu flashes a buy signal
Shiba Inu’s market value to realized value ratio (MVRV), which gauges the overall profitability of its holders, indicates that the token is currently undervalued. The one-day and seven-day MVRV ratios stand at -3.80% and -12.02%, respectively, at the time of writing.
The MVRV ratio measures the relationship between an asset’s market value and its realized value to determine whether it is overvalued or undervalued. A positive MVRV ratio suggests that the asset is overvalued, while a negative ratio indicates that the market is undervaluing the cryptocurrency relative to its initial acquisition cost.
Historically, a negative MVRV ratio has been a buy signal. This implies that SHIB is trading below its historical acquisition cost and could see a rebound. As a result, market participants looking to “buy low and sell high” may see this as an opportunity to accumulate token.
SHIB’s positive funding rate, currently at 0.0076%, supports this bullish outlook. A positive funding rate indicates that traders are paying a premium for maintain long positionsreflecting their expectation of a possible price increase.
SHIB Price Prediction: This Cloud Could Prevent a Potential Uptrend
Despite these positive signals, the strong bearish resistance against SHIB can make it difficult for the coin to regain its previous highs. Readings from its one-day chart show that the meme coin continues to trade below its Ichimoku cloud.
This indicator tracks the dynamics of an asset’s market trends and identifies potential support/resistance levels. When an asset is trading below Cloud, the market is in a downtrend and the current price is below the average price range over a certain period.
If this trend continues, SHIB Price Drop could expand by 7%, falling to $0.000018. However, if trading activity increases, the price of the meme coin could climb above the cloud to trade at $0.000026.
Disclaimer
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