Can Dogecoin’s Price Decline be Reversed?
Dogecoin (DOGE) has experienced a correction in its price over the past few days, following a surge to a two-year high. However, this correction has actually presented an opportunity for investors, as it indicates potential for growth and recovery.
The decline in Dogecoin’s price amounted to more than 26% in the last ten days, bringing it down from its peak of $0.178 to its current value of $0.134. Despite this loss, the decline has opened up new possibilities for DOGE, making it a more attractive asset compared to its main competitor, Shiba Inu.
Market Value to Realized Value (MVRV) Ratio
A key indicator that suggests Dogecoin is ripe for picking is its Market Value to Realized Value (MVRV) ratio. This ratio compares the market cap of a cryptocurrency to its realized cap and determines whether the asset is overvalued or undervalued.
- When Dogecoin’s price correction places it below -4%, it enters the opportunity zone.
- This zone, which ranges from -4% to -13%, has historically been the point of price recovery and accumulation.
Currently, Dogecoin’s MVRV stands at -10.4%, indicating that accumulating DOGE at this time could prove profitable once the recovery phase begins. On the other hand, Shiba Inu is far from the opportunity zone, giving Dogecoin a competitive advantage.
Whales and Bullish Outlook
The behavior of whales, or large holders of Dogecoin, further supports the bullish outlook for the cryptocurrency. Addresses holding between 1 million and 10 million DOGE have been holding onto their assets despite the corrections. This lack of selling indicates their confidence in a price rise, which will benefit Dogecoin when the recovery process starts.
Is a Recovery on the Cards for DOGE?
If the aforementioned factors continue to impact Dogecoin’s price positively, there is a possibility that the meme coin could reclaim the resistance level at $0.147 and turn it into a support floor. This breakthrough would allow DOGE to rise towards $0.150.
However, if the decline persists, Dogecoin’s price could fall below the support floor at $0.127. In such a scenario, if DOGE drops to $0.111, it would invalidate the bullish thesis and leave the meme coin vulnerable to reaching $0.100.
Hot Take: The Potential for Dogecoin’s Recovery
The recent correction in Dogecoin’s price has actually opened up new opportunities for investors. With a favorable MVRV ratio and strong support from whales, there is potential for DOGE to recover and experience further price growth.
Investors should keep a close eye on the market and monitor the behavior of whales and key indicators to make informed decisions about their Dogecoin investments.
Remember, as with any investment, it’s important to do thorough research and consider your own risk tolerance before making any financial decisions.
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