Dogecoin price recently abandoned a breakout after the entire crypto market crashed following uncertainty from the Middle East conflict. As the Bitcoin price shows a mild recovery to $61,200, other altcoins, including DOGE, are rallying. However, on-chain metrics suggest the DOGE price is headed for a 12% drop.
Dogecoin Price Is Rising Despite Negative Onchain Metrics
A look into Dogecoin’s on-chain metrics shows an altcoin struggling to remain afloat. Data from Santiment shows the price-DAA (Daily Active Addresses) divergence has dropped to a three-month low of -66%. The price-DAA divergence shows the relationship between a cryptocurrency’s price and its network activity.
A divergence of -66% indicates a significant drop in network activity relative to the price, suggesting that the price increase is not supported by a corresponding increase in user activity. This could be a sign of a weakening market sentiment, which is a bearish signal on the Dogecoin price.
Further, the NVT (Network Value to Transactions) ratio also spiked to a three-month high of 397.32. The NVT metric measures the relationship between market capitalization (network value) and transaction volume, and a spike, especially to a 3-month high while the price is down, indicates the network value is high relative to transaction volume.
This suggests that Dogecoin may be overvalued, which could cause its price to drop further. On the other hand, it could also mean that investors are holding on to their DOGE rather than transacting.
Despite the negative on-chain metrics, the DOGE price today is $0.1081, representing a 2.6% increase in the last 24 hours. Dogecoin price analysis shows this may not be the case for long.
DOGE Price Analysis: Brace for $0.095
DOGE price action is neutral to bearish. The chart indicates a potential reversal following a fake out above the neckline of a double bottom pattern. The price attempted to break out but quickly fell back below the 0.1150 resistance level. The price is currently trading slightly above the 50-day exponential moving average (EMA) but the fake-out signals a bearish sentiment.
Key Support and Resistance Levels
- $0.0950 — A strong support level that aligns with the bottom of the potential drop zone. This is the critical level to watch, as a break below could lead to further downside.
- $0.1050 — Current short-term support, aligning with recent price action.
- $0.1150 — The previous neckline is now acting as resistance after the price failed to hold above it.
- $0.1250 — High during the fake out and another key resistance area if price attempts a recovery.
If the DOGE price action forms a strong base at $0.0950, it may present a long-term buy opportunity. However, Dogecoin price prediction shows if the asset surges and breaks above the neckline, it would show crypto market strength, retest $0.13 or higher, and invalidate the bearish thesis.
The post Dogecoin Price Risks 12% Drop Amid Dwindling On-Chain Metrics appeared first on CoinGape.
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