Dogecoin (DOGE) prices have entered a downward trajectory over the past 1-2 days, despite experiencing a slight rise in the previous week. This fluctuation might indicate that investors are selling to avoid potential losses or to secure minor profits. What exactly is happening with DOGE?
Will Dogecoin Investors Sell?
Recently, Dogecoin’s price broke below the rising wedge pattern, although the previous surge had rekindled hopes for a breakout. Yet, the significant drop seen in June suggests that the meme coin hasn’t achieved the anticipated recovery. Consequently, there is mounting speculation that long-term DOGE investors may opt to sell their holdings to capitalize on gains. Increased profitable activity among active addresses supports this sentiment.
Currently, only 27% of active DOGE addresses are in profit, indicating a challenging market. The Market Value to Realized Value (MVRV) ratio further confirms this outlook; a 30-day MVRV ratio of 8.6% could exert selling pressure. Historically, MVRV levels between 6% and 20% have often triggered corrections in DOGE prices.
What Lies Ahead for DOGE?
Dogecoin is trading at $0.122 with an aim to surpass $0.128. Achieving this could result in a 5% price increase. However, the current market conditions suggest that such a rise might be unlikely. Conversely, if DOGE reaches $0.128 but fails to maintain this level, it could drop to $0.116, and potentially further down to $0.105, wiping out the 17% weekly gains.
Key Insights for Investors
Investors should consider the following:
- The 30-day MVRV ratio indicates potential selling pressure at 8.6%.
- Only 27% of active DOGE addresses are currently profitable.
- Historical MVRV levels between 6% and 20% often signal corrections.
- Support levels to watch are $0.116 and $0.105.
- Breaking above $0.142 could indicate the end of the decline.
In an optimistic scenario, breaking past the resistance could push DOGE prices to $0.130. However, to confirm the end of the downward trend, the price needs to reach $0.142, potentially indicating a new price trajectory.
