Dog-themed cryptocurrency Shiba Inu (SHIB) could be a candidate for a price rally if a key on-chain data indication comes true.
Dog-themed cryptocurrency Shiba Inu (SHIB) could be a candidate for a price rally if a key on-chain data indication comes true.
In a tweet, on-chain analytics firm Santiment singles out Shiba Inu as one of the notable large-cap assets currently showing significant undervaluation. This observation is based on the MVRV Z-score, a metric used to determine overvalued and undervalued assets based on average traders’ returns.
The MVRV indicator compares the market value (MV) and realized value (RV) of a cryptoasset. A high MVRV Z-Score indicates that the market value is significantly higher than the realized value, implying a likely overvaluation. Conversely, a low MVRV Z-Score indicates undervaluation, implying that the cryptoasset is now trading at a discount below its inherent value.
According Feeling’According to the analysis, Shiba Inu is currently underbought and its MVRV Z-score indicates undervaluation. This means that, on average, traders who have bought SHIB are currently holding it at a loss.
Historically, these periods of undervaluation have been followed by significant rallies as prices adjust to match their actual value. At the time of writing, SHIB is down 1.23% over the past 24 hours to $0.000017, reflecting the market’s generally lackluster price activity.
What this means for Shiba Inu
The indication of undervaluation is a potentially bullish signal for Shiba Inu. If this turns out to be true, SHIB could be on the verge of an epic price rally.
However, it must be noted that market sentiment plays a crucial role in cryptocurrency price movements, and Shiba Inu is no exception. Positive news, developments within the Shiba Inu ecosystem, or broader market trends could act as catalysts for the anticipated price rally.
That said, the next few weeks could prove crucial for Shiba Inu, and all eyes will be on whether this indication translates into a real market move.
While the crypto community awaits new developments, the question remains: will the undervaluation of Shiba Inu cause a massive market reversal? This answer is still unknown.