Dogecoin (DOGE) has been struggling, marking its seventh consecutive day of losses. The price has dropped to $0.11, raising concerns about its short-term outlook. As the largest meme coin by market cap, these movements are closely watched by the crypto community.Â
Potential Selling PressureÂ
On-chain analysis reveals that these concerns might be valid. One key indicator is the potential selling pressure at the current price level. According to data from IntoTheBlock, the In/Out of Money Around Price (IOMAP) metric shows significant selling pressure near the $0.11 mark. Â
The IOMAP categorizes addresses into three groups: those making money, breaking even, or losing money. This helps in identifying areas of support and resistance.Â
The data shows a large cluster of addresses that could act as a resistance barrier. Around 40,200 addresses hold 2.74 billion DOGE, worth approximately $300 million, above the current price. Â
This creates a resistance wall that could prevent upward movement. On the other hand, about 17,960 addresses purchased 1.49 billion DOGE around $0.11, providing some support. However, if the selling pressure increases, this support might not hold.Â
Key PointsÂ
Indicator | Current Value | Implication |
Price | $0.11 | Short-term bearish |
30-day MVRV Ratio | -7.26% | Potential for unrealized losses |
Resistance (IOMAP) | $0.11 (2.74 billion DOGE) | Strong resistance barrier |
Support (IOMAP) | $0.11 (1.49 billion DOGE) | Limited support |
Potential Downside Target | $0.09 | Increased selling pressure risk |
Potential Upside Target | $0.12 – $0.13 | Possible if golden cross occurs |
Key Metrics and IndicatorsÂ
Another crucial metric to consider is the Market Value to Realized Value (MVRV) ratio. This ratio measures the level of unrealized profit or loss in the market. A high MVRV ratio indicates high unrealized gains, suggesting that investors might be willing to sell. A low MVRV ratio, on the other hand, suggests unrealized losses, indicating that holders might prefer to wait for a price recovery.Â
Currently, Dogecoin’s 30-day MVRV ratio stands at -7.26%. Historically, DOGE has shown a tendency to recover when the ratio is between 9.53% and 21.88%. If the pattern holds, Dogecoin holders might have to brace themselves for more unrealized losses before a potential recovery.Â
Technical Analysis and Price PredictionÂ
Looking at the daily chart, Dogecoin’s decline started on July 27, when the price had rebounded from $0.13. Since then, the price has dropped by 17.55%. The Exponential Moving Average (EMA) provides additional insight into the price trend. The EMA is a technical indicator that shows the trend direction over a specific period.Â
Earlier, there was speculation about a golden cross, a bullish signal where a shorter EMA crosses above a longer one. However, the 50 EMA (yellow) is currently above the 20 EMA (blue), indicating a bearish trend. If this trend continues, Dogecoin might stay around the $0.11 level. Increased selling pressure could push the price down to $0.09.Â
On the flip side, if a golden cross forms, the bearish prediction could be invalidated. This would mean a potential bullish turn, pushing DOGE’s price to $0.12 or even $0.13. Â
In conclusion, Dogecoin’s current market conditions suggest caution. The $0.11 level poses a significant resistance due to the large amount of DOGE held at that price. Key metrics indicate potential for further downside, but a bullish turn could occur if technical indicators align. Investors should keep an eye on these signals to make informed decisions.Â
