Shiba Inu (SHIB), the dog-themed crypto, has experienced a tumultuous journey over the past few months, leaving investors on the edge of their seats. After witnessing a remarkable surge in value towards the end of 2021, the coin has since fallen sharply, sparking debates among analysts about its true worth.
While some argue that SHIB is undervalued, others firmly believe that it is simply a product of overhype. However, recent indicators have shed some light on the potential undervaluation of SHIB, leading to renewed speculation about its future trajectory.
One such indicator that supports the notion of SHIB being undervalued is its NVT ratio as shared by IntoTheBlock. The NVT ratio compares the market capitalization of a blockchain’s native token to its total transacted value over a specific period. At present, SHIB’s NVT ratio stands at 172, a considerable drop from its 52-week high of 788.59.
This suggests that SHIB may be undervalued when compared to other cryptocurrencies, as the amount of value being transacted on the blockchain seems relatively low in relation to its market capitalization.
Another indicator that supports the case for SHIB’s undervaluation is its MVRV ratio. The MVRV ratio assesses the market value of a cryptocurrency against its realized value.
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With SHIB currently exhibiting an MVRV ratio of 0.34, significantly lower than its historical average, it is suggested that a significant number of SHIB holders are currently sitting at a loss. This further reinforces the argument that SHIB may be oversold, indicating a potential buying opportunity for investors.
Nevertheless, it is important to exercise caution and avoid relying solely on technical indicators when assessing the value and potential of a cryptocurrency. SHIB, as a relatively new entrant in the crypto sphere, lacks an extensive track record, making it inherently susceptible to volatility and higher risk levels compared to more established cryptocurrencies.
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