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While Shiba Inu continues to trade at four-month lows, multiple indicators suggest a comeback may be imminent due to its negative MVRV score.
Market data from the intelligence platform Santiment reveals that Shiba Inu is one of the most undervalued crypto assets following the depressing sentiment that has swept the market in recent weeks.
In a recent update, Santiment called attention to the MVRV Z-Score of some large-cap crypto assets, including Shiba Inu and Bitcoin. This metric assesses whether an asset is overvalued or undervalued by comparing its market value (MV) to its realized value (RV), which is the average price at which the token was last moved.
A high score indicates the asset might be overvalued, while a low score suggests it might be undervalued. Toncoin (TON) returned the highest MVRV Z-Score at 6.14. This is further confirmed by TON’s remarkable price performance, boasting a 30-day yield of 22%, while other assets shoulder losses.
Bitcoin (BTC) and Ethereum (ETH) trailed TON with positive MVRV Z-Scores, which also put them in the overbought category despite their respective losses in June.
Shiba Inu is Undervalued
Interestingly, Shiba Inu’s MVRV ratio was not only low, but also returned a negative score. Emphatically, among the billion-dollar valued cryptocurrencies examined, Shiba Inu and Uniswap (UNI) posted the lowest MVRV Z-Score of -1.55 and -1.96, respectively.
📊 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
These negative scores mean that SHIB and UNI are the most underbought tokens among large-cap assets since, on average, traders are at a loss. This comes at a time when Shiba Inu is facing significant challenges staging a bull rally. Specifically, the price of SHIB tanked by over 32% in June.
In the past, periods of undervaluation have been succeeded by substantial price surges. In other words, Shiba Inu could be setting out for a major comeback soon.
Another Bullish indicator
Furthermore, a Shiba Inu bull rally is further supported by the current trend of investors continuously transferring their SHIB tokens from exchanges to private wallets for long-term holding. The Crypto Basic has called attention to this trend in various reports.
Two weeks ago, Santiment observed that the Shiba Inu reserve of the top ten exchanges had notably dropped by 2.4% since late May. On a yearly scale, exchanges have been drained of around 30 trillion SHIB tokens.
At the time of reporting, SHIB trades at $0.00001723, posting a meager 1.05% gain in the last 24 hours.