After hitting a six-month low earlier this week, Shiba Inu [SHIB] has witnessed a robust recovery. Presently, SHIB is being traded at $0.0000163 following an 8% surge within a 24-hour period.
The recent upswing in SHIB’s price is believed to have been fueled by investors capitalizing on the price decline, although trading volumes have decreased by 32% according to CoinMarketCap, indicating a lackluster demand.
Nevertheless, data from on-chain metrics suggests a potential increase in buying pressure.
MVRV Indicator Indicates a Buying Opportunity
The Market Value to Realized Value (MVRV) ratio for Shiba Inu recently dropped to 0.78, marking a multi-month low. Despite the recovery to 0.84, the current ratio still presents a favorable buying scenario.
An MVRV ratio below 1 implies that a majority of SHIB holders are at a loss, historically signaling an accumulation phase. A rebound in the MVRV ratio typically foreshadows a rally, potentially leading to substantial gains for the meme coin, as prominent holders are actively accumulating SHIB.
Notably, large wallet net inflows surged from -3.29 billion to 1.04 trillion, with whales acquiring over 1 trillion SHIB tokens in a span of just 24 hours.
This surge reflects the most significant single-day accumulation by whales in almost a month, showcasing their active involvement in buying the recent dip.
Analyzing SHIB’s Price Movement
Scrutinizing Shiba Inu’s one-day chart reveals a strengthening bullish trend. The Moving Average Convergence Divergence (MACD) line consistently staying above the signal line, alongside positive histogram bars, indicates substantial buying pressure.
The Relative Strength Index (RSI) supports this bullish sentiment, with a reading of 56 reflecting a buyer-dominated market. However, the tepid buying pressure was evident in the failed attempt to breach the $0.0000169 resistance level.
A failure to break above this resistance could trigger a downward movement towards the $0.0000149 support level. Conversely, an uptick in buying interest might push the altcoin to target the 1.618 Fibonacci level at $0.0000202.
Will SHIB Sustain its Upward Trajectory?
Ensuring that buyer demand remains robust is crucial for SHIB bulls to maintain control. Additionally, heightened activity from whales, exemplified by the recent acquisition of 1 trillion tokens, signifies a potential accumulation phase for the meme coin.
However, if traders who entered the market during the price decline decide to sell to cut their losses, it could lead to a bearish reversal.