The leading memecoin Shiba Inu (SHIB) fell 2% today amid overall market weakness, maintaining a sideways trajectory that it has followed since the beginning of August.
This discreet performance reflects the cautious sentiment in the overall market, with investors remaining hesitant. However, readings from two on-chain metrics suggest that SHIB may be on the verge of recovery.
SHIB may be on the verge of a jump
An assessment of the SHIB Liquidation Heatmap reveals potential buying pressure that could trigger a new upward momentum. According to data from Coinglass, there is a concentration of leveraged positions and liquidity above the memecoin's price near the $0.0000135 region.
SHIB Liquidation Heatmap. Source: Coinglass
A Liquidity Heatmap is an on-chain tool that visualizes areas where large amounts of stop-loss orders, leveraged positions, or buy and sell orders are concentrated. These zones act as magnets for price action, as the liquidation of leveraged trades can create rapid price movements.
For SHIB, the heatmap indicates that there is sufficient liquidity just above its current price of $0.0000122. This means that a coordinated buying wave could lift the memecoin if market conditions improve.
Moreover, the Net Unrealized Profit/Loss (NUPL) of the memecoin remained mostly negative throughout August, indicating that token investors have been facing unrealized losses since the beginning of the month.
SHIB NUPL. Source: Santiment
This metric reflects the net profit or loss of all coins moved on-chain, based on the price at which they were last moved. A positive NPL suggests increased profitability on the network, while a negative one, like that of SHIB, suggests that many investors are at a loss.
In such situations, traders often hesitate to sell at market prices to avoid realizing losses, so they tend to hold their positions. Prolonged holding periods like this can reduce selling pressure and support upward momentum for the coin's price in the short term.
Market uncertainty hits SHIB, but recovery is still possible
If buyers step in, the memecoin might target $0.0000129. A successful breakout above this resistance level could trigger the next upward move towards $0.0000138.
SHIB Price Analysis. Source: TradingView
However, if demand decreases and more traders sell, the value of SHIB could plummet below $0.0000167.
The article 'Shiba Inu may recover even with market decline' was first seen on BeInCrypto Brazil.
