Shiba Inu rallies 30% since August low as on-chain data points to further gains ahead

• Shiba Inu extends gains by 30% since the August 5 low, and trades at $0.00001415.
• Shibarium Layer 2 chain invites developers to build in the ecosystem, introducing a comprehensive set of tools.
• Shiba Inu traders realized nearly $14 million in losses on Thursday, a likely sign of capitulation.

Shiba Inu (SHIB), the second-largest meme coin by market capitalization, has observed a large spike in traders realizing losses on Thursday, on-chain data shows, even as SHIB has rallied 30% since the August 5 low of $0.00001078. This capitulation event could be a sign of the formation of a local price bottom, increasing the chances of a further price rebound. 

Meanwhile, the meme coin team announced on Wednesday that it has launched a toolkit for developers to facilitate building on Shibarium, Shiba Inu’s Layer 2 chain. 

Shibarium invites developers with toolkit and devportal launch

Shiba Inu’s Layer 2 chain launched a portal for developers to build in the ecosystem. Lucie, a marketing executive at SHIB, announced the toolkit and program for developers to build on Shibarium. 

Shiba Inu on-chain metrics highlight potential for gains

Shiba Inu holders realized losses on their holdings on Thursday, according to Santiment data, which shows that SHIB traders have taken $13.42 million in losses after shedding their SHIB tokens. Since August 1, SHIB traders have realized $54.61 million in losses, as seen in the chart below. 

When a large volume of SHIB tokens are sold at a loss, it is a sign of capitulation from investors.  such episodes tend to be followed by a recovery in the asset’s price. 

Shiba Inu NPL

Shiba Inu’s Market Value to Realized Value (MVRV) metric gives an idea of how overvalued or undervalued a token is. In the seven days, the MVRV for Shiba Inu stands at -1.782%, indicating that the asset is undervalued. This is a significant swing from the  1.023% registered in the 30-day time frame. 

Shiba Inu MVRV ratio (7-day) and (30-day)

SHIB gains 30% since August low

Shiba Inu (SHIB) trades at $0.00001415 at the time of writing. SHIB has gained 30.54% since the August 5 low of $0.00001078, erasing losses from the crypto bloodbath from early August. 

The Moving Average Convergence Divergence (MACD), a momentum indicator, shows green histogram bars above the neutral line. This suggests there is underlying positive momentum in SHIB’s price trend. However, traders still need to watch any changes in the indicator for signs of reversal in the trend. 

If the MACD line crosses under the signal line, it could imply negative underlying momentum is emerging, prompting a a price correction.

SHIB/USDT daily chart 

In case of a downturn, Shiba Inu could sweep liquidity at $0.00001285, a key support level for the meme coin throughout August.

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