A key technical indicator for the meme-inspired cryptocurrency Shiba Inu ($SHIB), the Relative Strength Index (RSI), is suggesting that the cryptocurrency is currently oversold after a major sell-off occurred in cryptocurrency markets.
According to data from crypto analytics firm CryptoQuant, Shiba Inu’s RSI is currently at 17, which suggests the cryptocurrency is strongly oversold. The figure comes after Shiba Inu lost nearly 90% of its value from an all-time high seen late last year, with the cryptocurrency currently trading at around $0.00000803.
SHIB’s price plunged amid a wider cryptocurrency market sell-off that saw Ethereum drop below its 2018 cycle high of $1,400 and BTC dip to an 18-month while the total market capitalization of the crypto space went under $1 trillion.
According to Investopedia, the RSI is a momentum indicator that’s used in technical analysis to measure the “magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset.”
The RSI can have a reading between 0 and 100, with values above 70 indicating that an asset is starting to become overbought or overvalued, and values below 30 indicating an asset is becoming oversold or undervalued.
CryptoQuant, as first reported by Gfinity Esports, SHIB’s RSI indicates that “83% of price movement in the last two weeks have been down and a trend reversal can occur.” Notably, data from Coinbase shows that investors using the platform have a median holding time for Cardano’s $ADA and Shiba Inu superior to most other cryptoassets.
At the time of writing, the typical hold time for SHIB on the Nasdaq-listed cryptocurrency exchange is of 142 days, with trading activity showing 78% of investors are buying and 22% are selling. Per Coinbase, a “long hold time signals an accumulation trend,” while a short hold time “indicates increased movement of tokens.”
As CryptoGlobe reported, the SHIBArmy has been rallying to burn more tokens amid the recent cryptocurrency market downturn, as it’s seen as a “huge opportunity” to reduce the meme-inspired cryptocurrency’s circulating supply.
The Shiba Inu community has for months been using token burns to reduce the cryptocurrency’s circulating supply, in a bid to help its price rise if demand rises, as there would be less supply available to meet that demand.
Polls conducted by Shiba Inu team member Archangel have shown most SHIB members believe that the burn portal was more important than the project’s metaverse. Some supported burning tokens as a marketing effort.
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