Shiba Inu eyes a potential rebound, as Santiment confirms the token is massively undervalued as a result of its MVRV Z-Score dropping below -1.5.
The cryptocurrency market has been trading within bearish territories, and Shiba Inu (SHIB) is no exception. However, the canine-themed meme coin recently drew attention following a post from blockchain analytics firm Santiment.
SHIB’s MVRV Score Goes Undervalued
The analytical platform confirmed Shiba Inu’s potential for a rebound due to its undervalued position, as indicated by the MVRV Z-Score. According to Santiment, Shiba Inu’s MVRV Z-Score has fallen to -1.55, suggesting the asset is significantly undervalued.
📊 According to MVRV Z-Score, which identifies overvalued and undervalued assets based on average trader returns, top caps are in the following categories:
🤑Overbought: Toncoin, Bitcoin, Ethereum
😟Underbought: Uniswap, Shiba Inu pic.twitter.com/PWESMh7wRf— Santiment (@santimentfeed) June 29, 2024
The MVRV Z-Score identifies overvalued and undervalued assets based on average trader returns. It assesses the difference between the market value and the realized value of a cryptocurrency. Afterward, it then divides this figure by the standard deviation of the market value.
A negative MVRV Z-Score, particularly one as low as -1.55, indicates that the market value of Shiba Inu is substantially below its realized value. This signals that the crypto asset might be oversold and undervalued.
In an accompanying chart, data from Santiment showed several top cryptocurrencies based on their MVRV Z-Scores. Overbought assets included Toncoin with a score of 6.14, Bitcoin at 1.96, and Ethereum at 1.23.
Toncoin’s score of 6.14 indicates it is highly overbought. This suggests that its current market value far exceeds its realized value. Similarly, Bitcoin and Ethereum, with MVRV Z-Scores of 1.96 and 1.23, respectively, are also in the overbought category, though not as extreme as Toncoin.
Shiba Inu Gearing for a Rebound
Conversely, data shows that with respective scores of -1.96 and -1.55, Uniswap and Shiba Inu are the most underbought assets. The last time Shiba Inu’s MVRV Z-Score dropped to this negative region was in February. Interestingly, it eventually led to the massive rally that saw SHIB reclaim $0.000045 in early March.
Shiba Inu MVRV Z Score | Santiment
Shiba Inu’s current market data further lends credence to its undervalued status. As of now, SHIB trades for $0.00001736, showing a modest 0.70% increase this morning. However, it remains down 41% from its high of $0.00002945 reached on May 29.
The token also experienced a significant decline in June, ending the month with a 32% drop. This represented its biggest monthly loss since the 41.82% collapse in May 2022 due to the Terra implosion.
Amid these declines, SHIB’s Stochastic is at 19, currently in the oversold region, according to CryptoQuant. This strengthens the potential for a price rebound. Stochastic is another indicator market participants use to evaluate whether an asset is overbought or oversold. Shiba Inu’s RSI is also at 32, hovering around oversold regions.
Shiba Inu Stochastic and RSI | CryptoQuant
With Shiba Inu’s Stochastic close to at 19, it further supports the MVRV Z-Score’s indication of undervaluation. This trend suggests that Shiba Inu might be poised for a recovery. Analyst Kyle Doops also asserted that SHIB might be gearing for a rebound to $0.00002, citing reduced selling pressure on exchanges.
