Shiba Inu Drops 12%: Potential Price Rebound Signals Buy Opportunity
- SHIBs negative MVRV ratio signals potential buying opportunity.
- Whale accumulation and reduced selling pressure boost SHIB.
- SHIB price faces resistance, with potential decline to $0.000018
Shiba Inus 12% decline in price has many traders on edge, but the latest on-chain data reveals potential for a market rebound. Whale activity and key indicators suggest SHIB could be set for a price bounce, making it appealing to buy for long-term investors.
Shiba Inu indicators signal Buy opportunity
Shiba Inu (SHIB) has dropped over 12% in price over the past week, signaling a potential buy opportunity. On-chain data shows that the meme coin may now be undervalued, with its market value to realized value (MVRV) ratio indicating a decline in market price compared to the original acquisition cost. Although this presents a buying opportunity, bearish sentiment could delay a potential price recovery.
The MVRV ratio for SHIB, standing at -3.80% for the one-day period and -12.02% for the seven-day period, suggests undervaluation. A negative MVRV ratio indicates that the market is undervaluing the token. Historically, such market conditions have signaled buying opportunities. This indicates that SHIB is trading below its historical acquisition cost, which could position it for a rebound in the near future.
Moreover, SHIB has also illustrated a positive funding rate of 0.0076%. A positive funding rate indicates that traders are paying a premium to maintain long positions, suggesting confidence in a potential price increase. However, SHIBs price remains under pressure due to bearish sentiment which may take time to overcome.
SHIBs current market situation is compounded by its trading below the Ichimoku Cloud. The Ichimoku Cloud helps identify momentum and support or resistance levels and when an asset is below the Cloud, it signals a downward momentum. This trend could continue, pushing SHIBs price further down by as much as 7%, with a potential decline to $0.000018.
Although Shiba Inu has witnessed significant decline, it has also attracted strong interest from large holders or whales, who are accumulating the coin. Over the past week, SHIB whales have increased their netflow by 16%. This suggests that major investors remain confident in SHIBs growth potential, fueling further optimism.
However, there is a reduction in selling activity, as many holders opt to hold onto their tokens to avoid incurring losses. According to data from Santiment, the negative Network Realized Profit/Loss metric shows that many traders who sold over the past week did so at a loss. This reduction in selling pressure has contributed to the recent mild increase in price.
At the time of writing, SHIB is trading at $0.000022. If the positive accumulation trend from whales continues and selling pressure remains minimal, SHIB could breach its resistance level of $0.000026. This would bring the token closer to its monthly high of $0.000033, setting the stage for potential further gains.
Read more: https://www.tronweekly.com/shiba-inu-drops-12-indicators-signal-buy/
Text source: TronWeekly
