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The popular memecoin Shiba Inu (SHIB) experienced a significant drop, losing critical support and trading at $0.00001325 with a 2.7% daily decline. Despite the price drop, on-chain metrics indicate a potential market bottom and a possible price recovery soon.
Market Sentiment and On-Chain Indicators
According to Santiment’s data, Shiba Inu’s social dominance reached its highest levels on a monthly timeframe, indicating increased interest and discussions about the altcoin on social media. This trend usually precedes significant price movements and reflects community engagement and sentiment. Since August 24, Shiba Inu’s price has been on a downward trend, raising concerns that increased social sentiment may not immediately translate into buying pressure.
Despite the decline, sentiment remains positive as many community members express confidence in Shiba Inu’s long-term potential. If broader market conditions improve, this positive sentiment could act as a catalyst for a rapid price recovery.
Shiba Inu’s 30-day equivalent value dropped to its lowest level in the past 10 months, indicating that recent transactions occurred at much lower prices compared to the previous year. This decline reflects decreased investor confidence in the short term and suggests a potential market correction on the horizon.
MVRV Ratio and Profitability
The 30-day and 365-day Market Value to Realized Value (MVRV) ratios have declined along with Shiba Inu’s price, indicating reduced profitability for average investors. Currently, only 30.71% of SHIB investors are in profit, showing that the asset’s profitability is at a critical support level. Further price declines could increase losses and push more investors into the red.
However, a low MVRV ratio can also be seen as a potential accumulation opportunity, indicating that SHIB is undervalued compared to its historical realized value.
Currently, SHIB‘s price is consolidating between demand and supply zones, with market makers recently causing a sharp drop by targeting the highest liquidity levels. Analysts predict that SHIB could find support around $0.00001260 before potentially rising to the $0.00001460 threshold, indicating a possible 16% increase following a 3% decline.
