Leading meme coin Shiba Inu (SHIB) has seen a significant drop in value, falling by 20% over the past week. Due to this double-digit price fall, a key on-chain metric suggests that SHIB has become undervalued, indicating it might be a good time to buy.

However, while the MVRV ratio suggests a favorable buying opportunity, SHIB’s downtrend may not be over.

Shiba Inu Becomes Undervalued, But There Is a Catch

An assessment of SHIB’s market value to realized value (MVRV) ratio using a 30-day moving average confirms its undervalued status. According to Santiment’s data, this ratio is -29.35% at press time. 

An asset’s MVRV ratio identifies whether it is overvalued or undervalued by measuring the relationship between its market value and its realized value. When an asset’s MVRV ratio is positive, its market value is higher than the realized value, suggesting it is overvalued.

On the other hand, as with SHIB, when the ratio is negative, the asset’s market value is lower than its realized value. This suggests that the coin is undervalued compared to what people originally paid for it.

Historically, negative MVRV ratios present a buying opportunity for those looking to “buy the dip” and “sell high.” However, the strong bearish sentiment plaguing SHIB suggests that the likelihood of a price rebound in the near term may be low. 

Notably, the bearish bias is reflected by the meme coin’s negative funding rate of -0.03% at press time.

The funding rate is the periodic payment exchanged between long and short traders in perpetual futures markets. It is designed to keep the price of a derivative close to the underlying asset. When the funding rate is negative, short traders pay long traders, indicating bearish sentiment as more traders bet on the price going down.

Therefore, while SHIB’s MVRV ratio indicates that the meme coin is currently undervalued, making it an attractive entry point for traders looking to “buy the dip,” the prevailing bearish sentiment suggests that the downtrend may not be over.

SHIB Price Prediction: Will Buyers Step In?

On the daily chart, SHIB’s Chaikin Money Flow (CMF) supports the bearish outlook above. As of this writing, the CMF indicator is below zero at -0.03, indicating a strong selling activity among traders.

An asset’s CMF measures money flow into and out of its market. When its value is below zero, buying activity is minimal. If SHIB’s demand remains low, it will extend its decline to $0.000014.

Conversely, if coin distribution stalls, it could drive SHIB’s value up to $0.000016.

Artificial Superintelligence Alliance (FET) has recently experienced a sharp 34% price decline, marking its largest drop in months. This crash validated a three-month-old pattern, which predicted such a correction.

While investors are suffering historic losses, whales seem to be capitalizing on the lower prices, indicating potential confidence in a future recovery.

Artificial Superintelligence Alliance Investors Are Spooked

Realized losses for FET holders have reached their highest levels in the altcoin’s history. This is a result of many investors selling off their holdings earlier this week to prevent further losses. As a result, the general market sentiment remains highly bearish.

Many retail investors are hesitant to make moves, reflecting the pessimistic outlook within the market.

This sell-off has led to heightened caution among the investor base, with traders refraining from significant action in the face of market volatility. The fear of additional losses is currently overpowering the desire to accumulate, causing many to stay on the sidelines.

Despite the widespread losses, whale activity has been notably bullish. Addresses holding between 1 million and 100 million FET have added approximately 92 million FET to their holdings over the past week, valued at $70.8 million. This accumulation at lower price levels signals that whales are positioning themselves for a potential recovery, showing confidence in FET’s long-term potential.

This whale accumulation is a key sign of optimism despite the current market downturn. Whales are often viewed as the more experienced market participants, and their ability to buy during periods of significant price decline may indicate their belief in an eventual recovery. 

FET Price Prediction: Bouncing Off The Support

FET’s price broke through the key support level of $1.19, falling to $0.77 at the time of writing. This decline confirms the validity of the head and shoulder pattern, which predicted a 43.6% drop to $0.73. The market seems to be experiencing a sharp correction, as expected, leading to this significant pullback.

Currently, FET is holding above the support of $0.76, suggesting it may have reached its market bottom. If this support is sufficient, the altcoin will have a chance to recover its recent losses. However, for a successful recovery, FET must flip $1.04 into support, signaling the end of the correction phase.

On the other hand, if FET loses the $0.76 support level, it could fall further. The next potential target is $0.73, and a drop below this level could see the price approaching $0.64, which would invalidate the bullish outlook and lead to further losses.