Shiba Inu (SHIB) is once again in the spotlight due to its sharp price increase. While this is good for investors, the question is whether this trend can continue.
The world’s second-largest memecoin has recently surprised investors with a double-digit price surge. SHIB’s price has risen 21% in the past 24 hours, bringing its value to $0.00003203 with a market cap of $19.09 billion.
The rise has propelled memecoin into the top 10 cryptocurrencies by market cap.
Possible problems
Nevertheless, signs of trouble are starting to emerge. While the price of the coin is surging, the trading volume has dropped significantly. The falling trading volume and rising prices indicate a high probability of a trend reversal to bearish.
Additionally, the weighted sentiment for SHIB has decreased in recent days, suggesting that bearish sentiment has increased. Despite this data, social volume continues to soar, which may further strengthen the bullish rebound.
Is a price correction inevitable?
Coinglass data shows that the Shiba Inu holdings have increased. While a rise in holdings typically indicates a continuation of price trends, the situation here seems to be different.
As previously evidenced by SHIB's OI surge, whenever the memecoin's OI rises to current levels, the price tends to adjust accordingly. If history repeats itself, SHIB may soon face a correction.
Another concerning issue is the fear and greed index for the token. At the time of writing, the market is extremely greedy, which could be a potential sell signal.
Technical indicators also point to similar possibilities. For example, the Relative Strength Index is at overbought levels, which may trigger a sell-off.
Chaikin money flow has recorded a decline, indicating that investors have begun to sell off SHIB.
Is there still room for growth?
Bulls still have the opportunity to push the value of the meme coin higher. Despite the recent price rise, the network value to transactions (NVT) ratio of Shiba Inu remains very low.
A low NVT ratio means the asset is undervalued, indicating that there is further room for price appreciation.
If this occurs, SHIB could break resistance and rise to $0.000032. If a correction happens, the memecoin could drop to $0.000028.
