Memecoin’s short-term price action may be dictated by a few key factors.
- Shiba Inu’s MVRV Z score indicated that it could be undervalued Network growth for SHIB surged, implying heightened interest in the memecoin
Shiba Inu [SHIB], the second-largest memecoin by market capitalization, had an underwhelming week on the price performance front. And yet, despite how its price action has been lately, data suggested that SHIB may actually be undervalued.
Should you buy SHIB?
Santiment’s data revealed that based on the MVRV Z-Score, SHIB can be considered underbought. A negative MVRV Z-Score for Shiba Inu indicates a situation where the current market price of SHIB is significantly lower than the average price at which investors previously bought and sold it.
This can be interpreted as a sign that SHIB might be undervalued, compared to its historical price movement. Now, while it doesn’t necessarily guarantee future price hikes, it can indicate potential buying pressure if the price dips closer to the average acquisition price.
Source: X
Another positive for SHIB would be the rise in the token’s network growth. At the time of writing, this metric had surged significantly, indicating a spike in the number of new addresses interacting with SHIB. If this trend continues, the altcoin’s price could see green in the future.
Along with that, the velocity around the token showed stability over this period. A stable velocity implied that the frequency with which SHIB was being traded at remained consistent over the last few days.
Even though these indicators painted a positive picture for Shiba Inu, there did seem to be some problems on the social front.
For example – The weighted sentiment for SHIB declined significantly over the last few days, implying the dominance of negative comments against SHIB over positive ones.
Source: Santiment
Burning up
Another factor that might impact Shiba Inu would be the amount of SHIB tokens being burned on a daily and a weekly basis.
There’s been a significant surge in Shiba Inu burning activity over the last 24 hours. A whopping 5,877,244 tokens were burnt over the aforementioned period, reflecting a massive 248.64% hike in the burn rate.
Here, it’s worth noting that burning refers to permanently removing tokens from circulation. This process aims to reduce the total supply of SHIB, potentially making the remaining tokens more valuable due to scarcity.
Take a Survey: Chance to Win $500 USDT
Next: Expect THIS from SOL’s price IF a Spot Solana ETF is approved!
Source
