When the MVRV forms a 'death cross' signal and a head and shoulders pattern appears on the 4-hour chart, it is important to understand the expectations for Shiba Inu's price.
On June 20, the trading price of Shiba Inu (SHIB) was $0.0000115, continuing its downward trend of more than 20% in just one month. As of the time of writing, due to weakened market interest, SHIB's daily trading volume has dropped by 38% to $78 million. Meanwhile, a key on-chain indicator has formed a 'death cross,' which typically signals that Shiba Inu's price is about to enter a strong downward trend. With the appearance of the 'death cross,' the price outlook for Shiba Inu.
Due to the 'death cross' in the Market Value to Realized Value (MVRV) ratio, SHIB's price may experience significant volatility. This bearish signal appears after the 30-day MVRV falls below the 365-day MVRV, indicating that traders who bought SHIB in the past 30 days have incurred greater losses than those who held for a year.
According to Santiment's data, traders holding SHIB for 30 days have lost 132%, while traders who bought it last year have lost 112%.
Due to recent selling by buyers, this cross may have a bearish impact in the short term. Additionally, when new buyers start to incur significant losses on popular meme coins like 'Shiba Inu,' new capital inflow may dwindle, increasing downside risk.
However, although this move may impact Shiba Inu's price performance in the short term, it could signal a price rebound. After short-term holders capitulate, there could be room for SHIB's price to rebound. Such severe losses may also deter investors from selling before reaching breakeven.
The head and shoulders pattern signals a 14% crash.
A head and shoulders pattern has appeared on the four-hour chart of Shiba Inu, although the neckline support is sloping. This pattern typically emphasizes a bearish price prediction for Shiba Inu, indicating that bears are about to take full control of the market, and another crash may be imminent.
The height is 14%, which means that if Shiba Inu falls below the support level of $0.000011, it could trigger a decline of 14% to $0.0000097. Recently, buyers have started to sell off, leading to a surge in selling pressure, which may result in such a drop.
Technical indicators also maintain bearish momentum, with an RSI of 42, indicating that the prevailing price momentum is bearish. The AO histogram also remains bearish, and as the histogram turns red, this bearish momentum may strengthen.
However, as CoinGape recently reported, whales have purchased 1.3 trillion tokens within 24 hours and are continuously accumulating SHIB. If these large addresses can accumulate tokens sold off by recent buyers, it may prevent a market crash and help the price recover.
In summary, Shiba Inu's price is at a critical moment as on-chain data turns bearish, indicating the possibility of a downward correction. At the same time, lower time frames suggest that bearish momentum is increasing due to the formation of bearish patterns and heightened selling pressure.
