Is Dogecoin’s 16% price drop the first step to a new ATH?

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    Dogecoin registered a double-digit price decline last week
    If a bullish breakout happens, then DOGE might first reclaim $0.13 on the charts

As a seasoned researcher with years of experience in the cryptocurrency market, I have seen my fair share of market fluctuations and trends. The recent double-digit decline in Dogecoin [DOGE] has left many investors feeling disheartened, but as history has shown us, every bearish trend can pave the way for a bullish breakout.

As a researcher delving into the world of cryptocurrencies, I experienced a challenging week last week with Dogecoin [DOGE] investors. This popular memecoin dipped by a significant double-digit percentage, causing concern among its holders. Yet, upon closer inspection, there appears to be more to this story.

Based on the most recent figures, it appears that Dogecoin (DOGE) could be following an old pattern. This pattern, if repeated, would lead to DOGE reaching new all-time highs as it did before.

Is history repeating itself?

Last week, Dogecoin experienced a 16% decrease in price according to CoinMarketCap’s data. This downward trend persisted over the past day as well, causing the meme-based cryptocurrency to drop by more than 3.5%. Currently, its value stands at approximately $0.1127, and it holds a market cap of over $16.8 billion. As a result, Dogecoin ranks as the 8th largest cryptocurrency globally.

The social activity surrounding it stayed elevated, indicating its appeal. Interestingly, even after a decrease in price, the overall feeling towards the meme-token showed improvement – A hint that optimistic feelings about the meme-token are growing.

One potential explanation for this investor confidence could be the secret advantage that Dogecoin holds.

Kevin, a well-known crypto expert, recently posted a tweet pointing out a possible trend that could be shaping the market’s most prominent meme coin. Remarkably, this pattern seems to have appeared on its graph on two previous occasions, leading the coin to reach new all-time highs in 2018 and 2021.

As I write this, Dogecoin (DOGE) appears to be consolidating on the price charts. If it manages to break out, history might just repeat itself – potentially leading to another exciting run for us crypto investors.

What are the odds though?

After AMBCrypto decided to examine the on-chain data of the memecoin, they aimed to determine if the statistics indicated a potential bullish surge. By assessing data from Santiment, we found that the MVRV ratio for DOGE had decreased, suggesting a bearish trend.

Nonetheless, its network activity remained high, as was evidenced by its stable daily active addresses. Its velocity also spiked, meaning that DOGE was used more often in transactions within a set timeframe. 

As we speak, the Fear & Greed Index for DOGE stood at 32%, indicating that the market is currently experiencing “fear.” This implies there could be an imminent bullish surge. Yet, it’s important to note that the long/short ratio has shown signs of bearishness, with a significant drop being recorded.

Ultimately, we examined the liquidation heatmap for Dogecoin to identify potential price points it might reach during a potential bullish trend.

We found that DOGE’s liquidations would rise sharply near $0.137. Therefore, in the event of a bull rally, DOGE might first reclaim that level. However, if the bears continue to dominate, then DOGE might drop to $0.09. 

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2024-08-04 02:15