- DOGE on-chain metrics indicate the top meme coin is recovering well from last Monday's market sell-off.
- DOGE's attempt to recover could be hindered by a descending trendline that started in April.
- The 200-day SMA could serve as a key resistance after a recent "Death Cross" signal.
- A rally above the $0.130 level will invalidate the bearish thesis.
Dogecoin (DOGE) is up 0.5% on Monday as it attempts to stage a comeback from last week's market decline. In the past week, DOGE rallied 25% amid signs of recovery visible across its on-chain metrics. However, the technical side shows that key indicators could hamper DOGE's road to recovery.
DOGE on-chain metrics signal recovery
Dogecoin is trading around the $0.106 key level, where investors accumulated 14.5 billion DOGE tokens, according to IntoTheBlock's data. Such heavy accumulation zones often act as key support levels when the market turns bearish.
DOGE In/Out of the Money
DOGE's 30-day Market Value to Realized Value (MVRV) Ratio is hovering around -3%, rising from -16% in the past week. This indicates that all investors who bought DOGE within the last 30 days are still at an average loss of 3%.
The Santiment Weighted Sentiment indicator helps capture a balanced overview of an asset's social volume combined with investor sentiment. The indicator spikes — with 10 as the maximum — when there's increased social volume around an asset and the messages are largely positive. It dips when the volume is still high but the sentiment is negative. If the social volume is high but the sentiment is mixed, it stays around 0. If the volume is low, it also stays around 0.
The chart below indicates that Dogecoin’s Weighted Sentiment increased to 3.56 over the weekend before a slight downturn to 1.30.
DOGE On-chain Metrics
Despite DOGE's on-chain metrics indicating a recovery, a few technical indicators and trends paint a somewhat bearish view.
DOGE could stay below descending trendline
DOGE is attempting another move to break the resistance around $0.111 on the 8-hour chart after experiencing a rejection on Sunday.
DOGE's Relative Strength Index (RSI) is at 50 and has crossed above its moving average, indicating a short-term bullish momentum. If the RSI momentum helps DOGE to clear the $0.111 resistance, it faces another hurdle around a descending trendline that began on April 8. This trendline has been a key resistance in the past four months, having rejected a rally in May and July. This resistance could hold for the next few weeks.
DOGE/USDT 8-hour chart
Meanwhile, DOGE saw a “Death Cross" on Thursday after its 50-day Simple Moving Average (SMA) crossed below its 200-day SMA. This often indicates the confirmation of a downward trend as it implies that the short-term trend (50-day SMA) is weaker than the long-term trend (200-day SMA). Hence, the 200-day SMA could serve as another key point for DOGE to see a rejection in case of a rally.
The bearish thesis will be invalidated if DOGE rallies above the $0.130 psychological level.
This analysis is also subject to Bitcoin's price performance as most cryptocurrencies often mimic its price movement.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Dogecoin Price Forecast: Bulls deploy $355M in DOGE longs amid Gensler exit confirmation
Dogecoin price crossed $0.40 on Friday, after a weeklong consolidation that saw DOGE tumble 13% from last week’s peak. Derivative market reports link the DOGE rally to Gary Gensler’s imminent exit.
Crypto Today: XRP gains 10%, Cardano, XRP, and DOGE price rallies, delay Bitcoin’s $100K breakout
The global cryptocurrency sector pulled $230 million capital inflows on Friday, as markets reacted positively to news of SEC Chair Gary Gensler’s imminent exit.
Cardano Price Forecast: ADA could rally by another 30% as on-chain data signals bullish sentiment
Cardano (ADA) surged 24% to $0.98 on Friday following rising weekly active addresses, increased open interest and spot buying pressure.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: Rally expected to continue as BTC nears $100K
Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.