The price of leading meme coin Shiba Inu has fallen by more than 10% over the past week. On-chain data suggests that this double-digit price decline has made the meme asset undervalued, presenting a buying opportunity for investors looking to trade against the market.
However, the ongoing bearish sentiment towards SHIB suggests that it may delay potential rallies.
Shiba Inu Flashes Buy Signal
Shiba Inu’s market value to realized value (MVRV) ratio, which evaluates 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, as of this 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 the asset is overvalued, while a negative ratio indicates that the market is undervaluing the cryptocurrency compared to its original acquisition cost.
Historically, a negative MVRV ratio has been a buying signal. This implies that SHIB is trading below its historical acquisition cost and could be due for a rebound. As a result, market participants seeking to “buy low and sell high” may see this as an opportunity to accumulate the token.
Supporting this bullish outlook is SHIB’s positive funding rate, currently at 0.0076%. A positive funding rate indicates that traders are paying a premium to maintain long positions, reflecting their expectation of a potential price increase.
SHIB Price Prediction: This Cloud Could Prevent Potential Uptrend
Despite these positive signals, the strong bearish resistance against SHIB may 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 momentum of an asset’s market trends and identifies potential support/resistance levels. When an asset trades below the Cloud, the market is in a downtrend, and the current price is lower than the average price range over a certain period.
If this trend continues, SHIB’s price decline could extend by 7%, falling to $0.000018. However, if trading activity spikes, the meme coin’s price could climb above the cloud to trade at $0.000026.
Disclaimer
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