Shiba Inu (SHIB) has experienced a significant price drop, shedding more than 10% over the past week, which has led to growing interest in the potential for a rebound. Here’s a breakdown of the key factors affecting SHIB’s current market outlook:
MVRV Ratio Indicates Undervaluation: The negative MVRV ratio (-3.80% on a one-day basis and -12.02% on a seven-day basis) suggests that SHIB is currently undervalued. This is a sign that the asset is trading below its historical acquisition price, which historically has been a potential buying signal for long-term investors looking to capitalize on a potential market reversal.
Positive Funding Rate: The positive funding rate of 0.0076% indicates that traders are paying a premium for long positions. This suggests that market sentiment is optimistic in the medium to long term, with many anticipating a price recovery.
Bearish Market Conditions: Despite the positive indicators, SHIB faces strong bearish resistance, as evidenced by its price trading below the Ichimoku Cloud. This technical indicator signals a downtrend, and if SHIB continues to trade beneath the Cloud, it could face additional downward pressure, potentially falling to around $0.000018.
Potential for Price Rebound: If trading activity picks up and SHIB manages to break above the Ichimoku Cloud, it could experience a price rally, with potential to reach $0.000026. However, this would depend on a significant shift in market sentiment and increased buying pressure.
Conclusion:
While SHIB is showing signs of undervaluation based on its MVRV ratio and the positive funding rate, there is strong bearish resistance preventing an immediate uptrend. Investors looking to buy the dip should be cautious, as the bearish trend could extend further before a potential rebound occurs. It’s important to monitor the broader market sentiment and technical indicators to assess when the price might be ready for a rally.
