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Why Dogecoin’s Downtrend Could Continue, Per Analyst
Dogecoin (DOGE) has been struggling to recover its all-time high of $0.7316 recorded in 2021, with recent price movements indicating a possible continuation of the downtrend. In his analysis, expert Ali Martinez highlights several key metrics that suggest Dogecoin’s price could drop further unless critical resistance levels are broken.
One such indicator is the “death cross” that recently occurred between the MVRV ratio and its 200-day moving average. This phenomenon is often seen as a bearish signal, predicting potential future losses of 26% or even 44%, based on past instances of similar occurrences. Martinez’s findings indicate that Dogecoin’s market price could follow this pattern.
Moreover, DOGE’s recent trend of lower highs and lower lows has remained intact, indicating that the momentum has not shifted in favor of the bulls. This downtrend is further exacerbated by a decline in whale activity on the network, with transactions involving large holders decreasing by nearly 88% since mid-November. A drop in whale activity typically signifies reduced interest from major investors, which may diminish buying support at critical levels.
Open Interest and volume have also decreased significantly, with a 3.79% decline over the past day and a 5.52% reduction in Open Interest during the same time frame. This development suggests that traders are less willing to commit significant capital to DOGE’s short-term price movements, further contributing to the asset’s challenges.
In conclusion, based on these key indicators, it appears that Dogecoin’s downtrend could continue unless a drastic change occurs, which would need to be reflected in its chart.
Source: ambcrypto.com
