Dogecoin's Slow Recovery: Volatility Ahead?
Dogecoin (DOGE) continues to experience price fluctuations following recent market turbulence. While Bitcoin (BTC) has shown a consistent pattern of Thursday/Friday drops, weekend volatility, and Monday recovery since May 23rd, DOGE's trajectory is less clear.
Dogecoin Price Analysis: Bearish Signals and Potential Buying Opportunities
Currently, the market structure for DOGE is bearish. The price sits below the 78.6% Fibonacci retracement level (based on the early May rally), suggesting further potential losses. A liquidity cluster around $0.17 indicates a possible retest of this support level before any significant recovery.
Source: DOGE/USDT on TradingView
Despite the bearish trend, some on-chain metrics offer a more optimistic outlook. However, the sustained selling pressure shown in the OBV (On-Balance Volume) highlights the continued dominance of sellers.
On-Chain Signals: Accumulation and Undervaluation?
- Network Value to Transactions Signal (NVTS): This modified NVT ratio, using a 90-day moving average of daily transaction volume, currently sits below May-June 2024 levels, potentially indicating undervaluation and a buying opportunity.
- Exchange Net Position Change: A negative net position change, as seen in early June and January, suggests accumulation as DOGE flows out of exchanges. This implies reduced selling pressure.
Source: Glassnode
Navigating Volatility: Advice for Dogecoin Investors
While on-chain data points to potential accumulation and undervaluation, the overall bearish trend necessitates caution. Investors should brace for volatility and the possibility of a retest of the $0.17 support level, and potentially further short-term losses. Strategies like dollar-cost averaging might be considered for managing risk.
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