Dogecoin Price Flashes Buy Signal as On-chain Data Points to 40% Rally

Sahil Mahadik
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Dogecoin Price

Highlights

  • The 30-day MVRV ratio at -3.3% suggests that short-term holders are currently at a loss, a signal that has often preceded market recovery
  • Dogecoin's large holders (10M-100M DOGE) have increased their holdings since April 2023, indicating an active accumulation trend.
  • A negative crossover between daily EMAs (20, 50, 100, and 200) could delay the Dogecoin price breakout from a bullish reversal pattern.

Dogecoin price plunged 1.3% to $0.096 during the U.S. trading session on Thursday. The downtick follows the broader market sentiment as Bitcoin extends correction below $60000. With most major cryptocurrencies struggling to find a bottom, September may see an extended downtrend. Despite the bearish outlook, large holders (whales) remain optimistic, continuing to accumulate DOGE even as its price declines, signaling long-term confidence.

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Dogecoin Price Eyes Major Reversal Amid Wedge Pattern Formation

On the daily chart, Dogecoin price is undergoing a consistent correction influenced by a falling wedge pattern. The price has resonated between two converging trendlines, dropping from $0.22 to $0.08, marking a substantial decline of 64%. This pattern typically suggests the potential for a future breakout, but for now, Dogecoin remains in a corrective phase as it continues to move within the wedge formation.

Currently, the DOGE price maintains a lateral trend within the bearish pattern, with the bottom support at $0.091. 

As the critical support level avoids any closing price below it, the underlying demand is clearly visible. The support trend line has provided four bounce-back opportunities within the falling wedge pattern. Meanwhile, the resistance trend line only has three reversals. 

Nevertheless, the increased bearish influence has resulted in a death cross event and a bearish crossover of 100 and 200 EMA. Hence, all the crucial EMAs in the daily chart maintain a bearish alignment. Moreover, the 20-day EMA and 50-day EMA act as dynamic resistances to keep the bullish growth under check. 

Currently, Dogecoin price is trading at $0.09825 with an intraday growth of 0.26%. Further, the lower price rejection in the previous candle projects a high possibility of a bullish cycle to challenge the overhead trend line. 

A potential breakout from wedge resistance will signal a major trend reversal, offering buyers suitable support to maintain a bullish outlook. The Dogecoin price prediction signals the post-breakout rally could target $0.15, registering a potential 40% rally.

The MACD indicator in the daily chart maintains a converged trend with the ongoing bearish alignment. However, the lack of intense histograms on either side projects an indecisive trend in the momentum indicator.

Dogecoin price
DOGE/USDT – 1d chart

DOGE Accumulation Surges as MVRV Decline Signals Potential Reversal

The Market-Value-to-Realized-Value (MVRV) indicator gauges the valuation of an asset by comparing its market capitalization to its realized capitalization. This metric helps identify overvalued or undervalued conditions in the market.

A 3.38% decline in the MVRV Ratio over the last 30 days suggests that short-term traders are witnessing loss. Any further downtick could trigger these speculative traders’ forced liquidation and cause initial price volatility. However, such events often attract long-term buyers in the market and drive a sustained reversal.

Doge MVRV Ratio
MVRV Ratio – Santiment

Moreover, the Santiment data shows a consistent surge in the supply distribution metric to $18.66 billion, with a range of 10 million to 1 billion DOGE token holders, suggesting growing market interest and increasing accumulation of DOGE tokens. This On-chain metric analyzes major stakeholders’ distribution and concentration of supply. It provides insights into market liquidity and potential price impacts from large holders.

This rise indicates that more significant amounts of DOGE are being held by a broader range of investors, which could impact market liquidity and price dynamics.

DOGE
supply distribution | Santiment

From a different perspective, the consolidation between the $0.091 and $0.1150 projects a potential head and shoulder pattern. With the neckline at the base support, the potential breakdown will trigger a massive correction in the Dogecoin price.

On the bottom side, the support levels are at $0.080 below the $0.091 neckline, followed by the $0.072. However, for a detailed analysis, check our top memecoin article.

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Frequently Asked Questions (FAQs)

1. What is causing the Dogecoin price correction?

Dogecoin is undergoing a correction within a falling wedge pattern, influenced by bearish market sentiment and negative EMA crossovers.

2. Why are whales accumulating Dogecoin?

Large holders continue accumulating DOGE, signaling long-term confidence despite current price declines.

3. What support levels are critical for Dogecoin?

Key support levels for DOGE Price are at $0.091, $0.080, and $0.072
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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.

Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.