On August 5th, the cryptocurrency market hit a seasonal low, with Dogecoin (DOGE) among those experiencing significant price drops. DOGE’s value plummeted to $0.083 before a slight recovery, leaving investors doubtful about the rebound’s sustainability.
What is Dogecoin’s Current Status?
Data from Santiment indicates that Dogecoin’s recent price fall has pushed its Market Value to Realized Value (MVRV) Z-Score into negative territory. This metric helps determine if a cryptocurrency is undervalued or overvalued relative to its fair price.
In a positive context, long-term investors usually gain more compared to short-term investors, signaling a potential bull market. However, a negative score suggests that short-term holders are capitalizing, which may indicate a bear market.
Historical data shows a similar pattern in February before significant market rallies. Prior occurrences were in October 2023, marking the start of a bull market, and June 2022, indicating a bear market.
Will Dogecoin’s Price Increase?
Currently, DOGE’s MVRV Z-Score remains negative, indicating a potential for another rise. Data from IntoTheBlock also shows that the Bulls and Bears indicator aligns with the MVRV value, signaling dominant bullish trends.
On-chain analysis reveals a dominance of bulls over bears. If this trend persists, Dogecoin’s price could see significant gains shortly.
Potential Scenarios for Investors
– DOGE’s price could possibly reach $0.16 in the mid-term.
– A successful breakout might push the price to $0.22.
– Conversely, a downward trend could see DOGE falling to $0.049.
According to the weekly price chart, Dogecoin is nearing a breakout from a descending triangle formation. Generally, falling below the support level indicates a bearish trend. However, for DOGE, this could also mean a potential move above the 78.6 Fibonacci retracement level.
The 78.6 Fibonacci level often reflects potential price values before hitting the main target. If DOGE achieves a successful upward breakout, its price could rise to $0.22. Conversely, a downward breakout could see the price drop to $0.049.