Unlocking The Dogecoin Code: One Factor Holds The Key To Its Next Ascent
11 Mai 2024 - 4:00PM
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Dogecoin, the meme-inspired cryptocurrency that took the internet
by storm in 2021, has seen a recent uptick in price. However,
experts are cautioning investors against mistaking this blip for
the start of a moon mission. Related Reading: $20 On The Horizon
For XRP? Unpacking A Potential 650x Surge And What It Means DOGE
Price Volatility Takes A Vacation One factor tempering enthusiasm
is Dogecoin’s current lack of volatility. While price swings are
often a hallmark of the cryptocurrency market, DOGE’s volatility
has hit a 30-day low. This calmness suggests the recent price
increase might not translate into a sustained upward trend.
Memecoins like Dogecoin thrive on volatility, and the current lull
suggests a period of price stability, which isn’t necessarily bad,
but it’s unlikely to trigger the explosive rallies we’ve seen in
the past. Source: IntoTheBlock Dogecoin Network Activity: Apathy Or
Accumulation? Another dampener on the celebratory champagne showers
is the low user activity on the Dogecoin network. The number of
active addresses, which indicates user engagement, is currently
hovering around 52,000. This is a significant drop compared to
March 2024, when a surge in active addresses coincided with a price
jump to $0.22. Total crypto market cap currently at $2.18 trillion.
Chart: TradingView Historically, spikes in Dogecoin’s user activity
have foreshadowed price increases. The current low suggests a lack
of excitement or, perhaps, a period of accumulation by investors
who are waiting for the right moment to jump in. DOGE Stuck In
Consolidation: A Sideways Serenade Or Coiling For A Leap? For the
past few weeks, Dogecoin’s price has been stuck in a consolidation
phase, oscillating between $0.14 and $0.16. This sideways movement,
while frustrating for those hoping for a quick return, could be a
sign of a different kind of preparation. Doge price action in the
last 24 hours. Source: Coingecko Consolidation periods often
precede significant breakouts. While it doesn’t guarantee a future
surge, it suggests the price is finding support and could be
coiling for a potential leap. Related Reading: XRP All Talk, No
Action? Social Media Booms, But Price Stuck In The Bear Pit A
Glimmer Of Hope: MVRV Z Score Hints At Undervaluation A beacon of
optimism comes from the MVRV Z Score, an indicator that suggests
Dogecoin might be currently undervalued. This metric essentially
compares the market value of a coin to its historical value. A
score below a certain threshold suggests the coin might be
undervalued and has room for growth. A Slow Burn Or A Surprise
Spark? The current data paints a picture of a cautious future for
Dogecoin’s price. While a major rally seems unlikely in the
immediate future, there are underlying hints that suggest potential
for growth. The low volatility and user activity could be signs of
consolidation and accumulation, respectively, both of which could
precede a future price increase. Featured image from
@inevitable360/X, chart from TradingView
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