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Dog-themed cryptocurrency Shiba Inu (SHIB) could be a candidate for a price rebound if a key indication from on-chain data comes true.
In a tweet, on-chain analytics firm Santiment points 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 trader returns.
The MVRV indicator compares the market value (MV) and the realized value (RV) of a crypto asset. A high MVRV Z-Score indicates that the market value is significantly higher than the realized value, implying probable overvaluation. In contrast, a low MVRV Z-Score indicates undervaluation, implying that the crypto asset is now trading at a discount below to its inherent worth.
According to Santiment’s analysis, Shiba Inu is currently underbought, with its MVRV Z-Score indicating undervaluation. This means that, on average, traders who have bought SHIB are currently holding it at a loss.
Tomiwabold OlajideHistorically, such periods of undervaluation have been followed by significant rallies as prices adjust to coincide with their true value. At the time of writing, SHIB has fallen 1.23% in the previous 24 hours to $0.000017, reflecting the market's overall lackluster price activity.
What this means for Shiba Inu
The indication of undervaluation is a potentially bullish sign for Shiba Inu. If this turns out to be accurate, SHIB could be on the verge of an epic price rebound.
However, it should be borne in mind that market sentiment plays a crucial role in the price movements of cryptocurrencies, 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 rebound.
That said, the coming weeks could prove pivotal for Shiba Inu, and all eyes will be on whether this indication translates into real market movement.
As the crypto community awaits further developments, the question remains: will Shiba Inu's undervaluation trigger a massive market reversal? this answer remains yet unknown.
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