Shiba Inu [SHIB] has once again captured attention with its significant price surge. While investors have been benefiting from this, there are questions arising about the sustainability of this trend.
Shiba Inu Shows Strong Momentum
The world’s second-largest meme cryptocurrency surprised investors recently by experiencing a substantial increase in its price.
Over the past 24 hours, SHIB’s price soared by 18%, reaching $0.0000309 and boasting a market capitalization exceeding $18 billion. Consequently, the meme coin secured a spot in the top 10 cryptocurrencies by market cap.
However, warning signs emerged. Despite the double-digit price surge, SHIB saw a sharp decline in its trading volume.
A drop in trading volume amid a price rally often indicates a potential reversal towards a bearish trend.
The Weighted Sentiment of SHIB also decreased in recent days, suggesting a growing bearish sentiment. Nevertheless, the Social Volume saw a sharp increase, which could further fuel its bullish momentum.
Is a Correction in Price Inevitable?
Data from Coinglass indicated a considerable rise in Shiba Inu’s Open Interest. While a surge in OI typically implies a continuation of the current price trend, the situation appeared different this time.
Historical data revealed that whenever SHIB’s OI reached its current level, a price correction followed. Therefore, if history repeats itself, SHIB might be susceptible to a pullback soon.
Another red flag was visible through the token’s Fear and Greed Index, which showed the market sentiment in “extreme greed,” signaling a possible sell-off. Technical indicators also hinted at a similar scenario.
For example, the Relative Strength Index (RSI) entered the overbought territory, potentially prompting a sell-off. Additionally, the Chaikin Money Flow (CMF) showed a downward trend, indicating that investors were already selling SHIB.
Nevertheless, there are still chances of bullish momentum driving the meme coin’s value higher.
Despite the recent price surges, Shiba Inu’s Network to Value (NVT) ratio remained low. A low NVT ratio suggests that an asset is undervalued, hinting at the possibility of further price appreciation.