Shiba Inu (SHIB), one of the most recognized meme coins, has seen a notable decline in value, dropping over 10% in the past week. On-chain metrics suggest that this dip has positioned SHIB as an undervalued asset, potentially offering an attractive buying opportunity for investors who are willing to trade against the prevailing market sentiment. However, there are important factors to consider before making any investment decisions.
SHIB’s Undervalued Status and Market Indicators 📉
The market value to realized value (MVRV) ratio, a key indicator of the token’s profitability, reveals that SHIB is currently undervalued. As of now, the one-day MVRV stands at -3.80%, while the seven-day MVRV shows -12.02%. A negative MVRV ratio suggests that SHIB is trading below its historical acquisition cost, indicating that the market is undervaluing it. Historically, such conditions have been a sign for buyers to enter the market, as SHIB could be primed for a rebound. Additionally, the token’s positive funding rate of 0.0076% further suggests that traders expect the price to rise, as they are willing to pay a premium to maintain long positions.
Potential for a Rebound Amidst Bearish Pressure 🚀
Despite the favorable on-chain data, Shiba Inu continues to face significant resistance from the broader bearish market trend. The coin’s price remains below the Ichimoku Cloud on its one-day chart, signaling that the market is currently in a downtrend. When an asset trades beneath the cloud, it typically indicates that the price is lower than the average market range over a given period, making a swift recovery more challenging. If this trend persists, SHIB could see further declines, potentially dropping another 7% to around $0.000018.
What’s Next for SHIB?
The current market scenario for SHIB remains complex. While the asset is undervalued based on the MVRV ratio and has a positive funding rate indicating a potential rise, the bearish market resistance may delay or hinder any significant rallies. For those considering entering the market, it’s crucial to monitor key levels closely. If SHIB can break above the Ichimoku Cloud, it could potentially surge to $0.000026, signaling a reversal in sentiment and providing an opportunity for traders. However, patience and caution are required, as the market’s volatile nature continues to be a key factor in determining SHIB's next moves.
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