Is Shiba Inu on the verge of a breakout
- On-chain indicators suggest that SHIB’s price hit a local bottom on 5 October.
- Demand for the altcoin, however, remains low.
The price of leading meme coin Shiba Inu [SHIB] might be poised for a rally after hitting a local price bottom during the intraday trading session on 5 October, according to on-chain data sourced from Santiment.
Read Shiba Inu’s [SHIB] Price Prediction 2023-24
Has the dog got its “woof” back?
In timing local bottoms, the Age Consumed metric has proven effective. This metric tracks the number of tokens changing addresses on a certain date, multiplied by the time since they last moved.
Typically, when this metric witnesses a surge, it suggests that a significant amount of once-idle tokens have begun to change addresses, hinting at a sudden and strong shift in the behavior of long-term holders.
Conversely, when the Age Consumed metric dips, long-held coins remain in wallet addresses without being traded.
This metric is an excellent tool to track assets’ bottoms because long-term holders are not often predisposed to swift movements of their dormant coins. Therefore, whenever this happens, it results in major shifts in market conditions.
According to data fetched from Santiment, SHIB’s Age Consumed climbed to 200.78 trillion on 5 October, marking its highest daily value in the last month. The altcoin’s price closed the trading day at $0.0000071 and has since slightly increased.
At press time, SHIB exchanged hands at $0.000007252, registering a 2% price growth since 5 October.
Weak hands are in
Another on-chain metric that suggested that SHIB logged a price bottom on 5 October was its Network Profit and Loss (NPL) metric.
This metric tracks the average profit or loss of all coins that change addresses daily to determine the periods of profit-taking or holder capitulation on-chain.
Therefore, whenever an asset’s NPL suffers a dip, it signals a short-term capitulation of ‘weak hands’ and the re-entry of ‘smart money.’ This is followed by a price surge as this new group of traders and investors take to coin accumulation.
This played out with SHIB on 5 October. According to data from Santiment, SHIB’s NPL dropped to -1.2 million that day, after which the alt’s price soon began to climb.
Realistic or not, here’s SHIB’s market cap in BTC terms
Demand for SHIB remains low
Among spot traders, SHIB’s daily distribution exceeds accumulation. As of this writing, key momentum indicators were pegged below their respective neutral lines. For example, the coin’s Relative Strength Index (RSI) was 43.70, while its Money Flow Index (MFI) was 37.28.
Likewise, its Chaikin Money Flow (CMF) was below its zero line at -0.00. A negative CMF value is a sign of weakness in the market, as it signals liquidity exit.