Shiba Inu (SHIB) Faces Potential Decline as Overvaluation and Holder Sell-Off Looms

  • Shiba Inu’s (SHIB) network is approaching overvaluation, which could lead to a price drop.
  • SHIB holders have amassed trillions of tokens between $0.000020 and $0.000023, hinting at potential resistance to further gains.
  • NVT Ratio analysis suggests a challenging period ahead for SHIB’s price rebound.

Shiba Inu (SHIB) faces potential decline due to network overvaluation and increased token supply, with key metrics pointing towards resistance and possible further price drops.

Shiba Inu Faces Market Volatility Amidst Rising NVT Ratio

Shiba Inu (SHIB) is currently experiencing a turbulent period as key metrics indicate potential challenges for price recovery. The Network Value to Transactions (NVT) Ratio, a crucial indicator, has been on the rise. A higher NVT Ratio suggests that the market cap is outgrowing transfer volumes, often a precursor to overvaluation. On June 11, the ratio stood at 24.58, but at the time of writing, it has surged to 86.80, signaling significant overvaluation of the SHIB network.

Challenges in Price Recovery for SHIB Amidst High Valuation

The increased NVT Ratio implies that SHIB’s price might find it difficult to rebound from recent lows. Currently trading at $0.000020, SHIB has experienced a 10.69% decline over the past week. Based on recent analyses, the token could potentially fall further, possibly reaching $0.000018, contingent on the NVT trend.

Holders Poised for Potential Sell-Off

Another critical metric, the Exchange Net Position Change, indicates a positive trend of 1.13 trillion tokens now available for sale. This suggests that holders are ready to let go of their tokens, potentially impacting SHIB’s price negatively. Historical data shows that an increased supply ready for market sale often exerts downward pressure on prices.

Support and Resistance Levels Examined

A detailed analysis of the Global In/Out of Money indicator, which measures profit or loss across various addresses, highlights the disparity between different price levels. For instance, only 1,720 addresses have purchased 452.80 billion SHIB at $0.000019, while 100,530 addresses have accumulated 66.75 trillion SHIB at $0.000023. This uneven distribution indicates potential resistance, with SHIB possibly facing significant selling pressure at the higher price levels of $0.000020 and $0.000023.

Conclusion

In summary, Shiba Inu (SHIB) is facing a critical juncture as overvaluation signs become evident through rising NVT Ratios and increased token availability for sale. While the price currently stands at $0.000020, potential resistance at upper levels and a high supply of tokens ready for sale could drive the price down to $0.000018. Investors should closely monitor these metrics to gauge future price movements and make informed decisions. SHIB holders may need to brace for a possible decline as the market navigates through this volatile period.

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Gideon Wolf
Gideon Wolfhttps://en.coinotag.com/
GideonWolff is a 27-year-old technical analyst and journalist with extensive experience in the cryptocurrency industry. With a focus on technical analysis and news reporting, GideonWolff provides valuable insights on market trends and potential opportunities for both investors and those interested in the world of cryptocurrency.
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