The meme coin Shiba Inu (SHIB) is in a downward spiral: Over the last month, the coin with the cute dog has lost significant value, dropping by around 19%. Although the price briefly recovered, it has been steeply declining since Shiba Inu announced on X on August 24, 2024, that it plans to introduce a Decentralized Autonomous Organization (DAO). For many SHIB investors, this is a severe setback, but crypto whales seem to be sensing an opportunity
Shiba Inu (SHIB) MVRV ratio
On-chain analysis of the market value to realized value (MVRV) ratio shows that Shiba Inu currently presents a good buying opportunity for investors.
According to data from Santiment, SHIB’s 30- and 90-day MVRV ratios stand at -1.52% and -23.9%. The negative ratios suggest that the meme coin is undervalued. The current price is lower than the average price of all coins in circulation, presenting an opportunity for investors looking to buy during price dips.
Price arop attracts crypto whales
SHIB whales have noticed the undervaluation and increased their trading activities. The number of transactions valued between $100,000 and $1,000,000 has risen over the past week. During the SHIB crash, the number of transactions surged significantly.
An increase in large transactions often signals an upward trend. Investors typically view heightened whale activity as a positive sign. With strengthened confidence in the coin, they are more likely to buy, potentially leading to a price increase.
SHIB remains vulnerable to price declines
Despite the increased interest from whales, Shiba Inu remains vulnerable to price declines according to technical analysis. The Chaikin Money Flow (CMF) fluctuates around its midpoint and frequently falls below it. The CMF tracks the inflow and outflow of capital; a value below zero often indicates market weakness, with more capital flowing out of the asset than in. Analysts often see this as a precursor to a price drop.
If this trend continues, the SHIB price could fall to $0.000010. However, if the situation turns around for Shiba Inu, the meme coin could break through $0.00001167 and continue to rise. Currently, SHIB is trading at $0.00001404, with a market capitalization of around $8.2 billion.
