The SHIB price has been experiencing noticeable movement lately, with a marked increase in its 7-day MVRV ratio suggesting that a considerable number of holders are currently profiting. However, whale activity has remained subdued, demonstrating only slight accumulation, which may restrict further price increases. While SHIB’s EMA lines indicate a bullish trend, highlighted by a golden cross formation, the token encounters significant resistance ahead.
All these factors combined imply that SHIB’s ongoing rally could face hurdles in maintaining its momentum.
7D MVRV Indicates Potential Correction for SHIB
As a prominent meme coin, Shiba Inu recently witnessed its 7-day Market Value to Realized Value (MVRV) ratio soar sharply from 3.1% to 9.57% within a span of 24 hours, accompanied by a 12% rise in price. This significant jump indicates that a large fraction of SHIB holders are now in profit. The MVRV ratio assesses the average gains or losses of circulating tokens against their acquisition prices over the past seven days, thereby providing insight into short-term profitability.
An increase in the MVRV ratio typically suggests that more investors are in profit, often triggering profit-taking behavior. The 7-day MVRV Ratio serves as a crucial metric for evaluating short-term market sentiment. A high ratio may imply that the asset is overbought, indicating a potential price correction.
Read more: 6 Best Platforms to Purchase Shiba Inu (SHIB) in 2024
Historically, SHIB’s MVRV ratio surpassing the 9% threshold has often preceded significant pullbacks. In the last two occasions when SHIB’s 7D MVRV ratio exceeded this level, the token underwent substantial corrections of 50% and 18% in the subsequent weeks.
With this historical backdrop, even though the recent price uptick may seem bullish, it could indicate that SHIB is entering a phase of increased vulnerability to a sell-off.
Whale Accumulation of SHIB Remains Limited
Let’s take a closer look at whale activity concerning Shiba Inu. From late July through mid-August, whales offloaded significant amounts of SHIB, aligning with a 42% price decline over three weeks.
Monitoring whale movements is critical as these large holders wield considerable influence over the market. Their transactions frequently indicate trend shifts. When whales dispose of tokens, it may imply they anticipate a price drop. Conversely, their accumulation is generally regarded as a bullish sign, reflecting confidence in upward price movement.
Although whales began to accumulate SHIB again at the end of August, this activity was short-lived, and they soon reduced their holdings again. In recent days, there has been some accumulation of SHIB by whales. However, this accumulation has been relatively minor compared to earlier periods.
This suggests that the recent price surge may not be sustained, or at the very least, that whales are not fully convinced of the strength behind the current rally. The cautious nature of whale accumulation indicates lingering uncertainty, which could suggest instability or a lack of confidence in the sustainability of the recent upward trend.
SHIB Price Forecast: Is $0.0002 Reachable?
The Exponential Moving Average (EMA) lines for SHIB are currently displaying a bullish trend, with a golden cross having formed just a few days ago. The golden cross is widely regarded as a bullish signal in technical analysis, occurring when a short-term EMA crosses above a long-term EMA.
Unlike simple moving averages, EMA lines place greater emphasis on recent price data. When the shorter EMA is positioned above the longer one, it signifies bullish momentum, indicating that buyers are driving prices higher. In contrast, a bearish signal is produced when the short-term EMA falls below the long-term EMA, indicating downward pressure.
While SHIB’s EMA lines appear promising, indicating the potential for a continued upward trend, significant resistance levels lie ahead at $0.0001763 and $0.0001846. Historically, these resistance areas have proven to be formidable barriers for SHIB.
Read more: Shiba Inu (SHIB) Price Prediction for 2024/2025/2030
Pushing through these levels is essential for the coin to attempt a test of the $0.0002 mark. Should these levels be breached, SHIB could witness a new influx of buying pressure, driving the price towards higher valuations.
However, if the MVRV ratio continues to exert pressure on the market, and whales maintain their hesitant approach, there’s a chance that SHIB’s upward trend could reverse. In such a case, SHIB may find itself testing critical support levels at $0.00015 and $0.00013, as meme coins strive to regain the hype of prior months.
A breakdown below these support levels could trigger a bearish shift in market sentiment, erasing many of the recent gains.
Disclaimer
As per the Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be perceived as financial or investment advice. BeInCrypto aims for accurate, unbiased reporting, but market conditions can change without warning. Always perform your own research and consult with a professional before making any financial decisions. Please be aware that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
