Shiba Inu’s (SHIB) 12% Drop Signals a Buy, But There Is a Catch

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Over the last seven days, the cost of the popular meme token Shiba Inu has dropped by over 10%. Data from blockchain analysis indicates that this significant price drop might be making Shiba Inu an undervalued asset. This situation could potentially offer a trading opportunity for investors who are willing to invest against the market trend.

However, the ongoing bearish sentiment towards SHIB suggests that it may delay potential rallies.

Shiba Inu Flashes Buy Signal

In simpler terms, the MVRV ratio for Shiba Inu, a measure that assesses the profitability of its holders, suggests that the token is currently being sold at a lower price than it should be, given recent market activity. At the moment, the one-day and seven-day MVRV ratios are -3.80% and -12.02%, respectively.

The MVRV (Market Value to Realized Value) ratio compares an asset’s current market value with its actual worth based on past transactions, helping us decide if it’s overpriced or underpriced. A higher-than-zero MVRV implies the asset is overvalued, while a ratio less than zero means the market might be underestimating the cryptocurrency’s true value, considering its initial purchase cost.

Historically speaking, when the MVRV ratio (Market-Value-to-Realized-Value) is negative, it has often been seen as a signal to buy. This suggests that SHIB is currently trading at a price lower than what investors originally paid for it, which might indicate an upcoming rise in value. As such, those looking to capitalize on the “buy low, sell high” strategy may view this situation as a chance to amass the token.

Backing this optimistic perspective, Shiba Inu (SHIB) boasts a favorable funding rate, sitting at 0.0076%. This positive funding rate means that traders are actually paying a fee to keep long positions open, signaling their belief that the coin’s price could potentially rise in the future.

SHIB Price Prediction: This Cloud Could Prevent Potential Uptrend

Regardless of the encouraging signs, the robust opposition to SHIB could hinder the coin’s efforts to reclaim its past peaks. A look at its daily chart suggests that the meme token is still transacting below its Ichimoku Cloud level.

This measure follows the movement patterns in an asset’s market and marks possible points of strength or weakness as support or resistance. If the asset’s price falls below the Cloud, it signals a downward trend, with the current price being lower than the typical price band for a specific timeframe.

If the current pattern persists, Shiba Inu’s price might drop by around 7%, reaching approximately 0.000018 USD. Conversely, if trading activity significantly increases, the meme coin could potentially surge and trade above the cloud at about 0.000026 USD.

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2025-01-13 18:48