Shiba Inu (SHIB), the popular meme coin, could be primed for a price surge if a key metric holds true. On-chain analytics firm Santiment recently highlighted Shiba Inu as a large-cap asset exhibiting significant undervaluation, raising hopes of a potential rally among investors.
This observation hinges on the MVRV Z-Score, an indicator that gauges whether a cryptocurrency is overvalued or undervalued based on average investor returns. The MVRV metric compares the market value of an asset with its realized value, essentially reflecting the price paid by investors. A high MVRV Z-Score suggests the market value is inflated compared to the realized value, potentially indicating an overvalued asset. Conversely, a low MVRV Z-Score signifies undervaluation, implying the asset is trading below its intrinsic value.
According to Santiment’s analysis, Shiba Inu currently falls into the undervalued territory based on its MVRV Z-Score. This translates to a situation where, on average, SHIB holders are experiencing losses on their investments. Historically, such periods of undervaluation have often been followed by price corrections as the market adjusts to reflect an asset’s true value.
At the time of writing, however, SHIB’s price reflects the broader market’s sluggishness, dipping by 1.23% in the last 24 hours to $0.000017.
Undervaluation: A Bullish Sign for SHIB?
The indication of undervaluation presents a potentially bullish scenario for Shiba Inu. If this trend holds, SHIB could be on the cusp of a significant price rebound. However, it’s crucial to remember that market sentiment heavily influences cryptocurrency prices, and Shiba Inu is no exception. Positive news surrounding the project, developments within the Shiba Inu ecosystem, or even broader market trends can act as catalysts for a price upswing.
The coming weeks could be a defining period for Shiba Inu. Investors are closely watching to see if the current undervaluation translates into tangible market movement. The question remains: will Shiba Inu’s undervalued status trigger a substantial market reversal? Only time will tell.
