news 
Why Dogecoin’s Downtrend Could Continue, Per Analyst
Dogecoin, a popular cryptocurrency, has been struggling to recover its all-time high of $0.7316, recorded in 2021. Despite its weekly performance being positive, the daily and monthly metrics are telling a different story. The digital asset has plummeted by approximately 34.2% over the last day, trading at $0.2608.
The analyst, Ali Martinez, believes that Dogecoin’s downtrend could continue due to several reasons. Firstly, he highlighted the recent “death cross” involving the MVRV ratio and its 200-day moving average. This phenomenon generally occurs when a shorter-term moving average crosses below a longer-term moving average, signaling potential further declines.
Martinez noted that this pattern has historically resulted in significant losses for Dogecoin investors. In his analysis, he found that during the last two instances of this event, the cryptocurrency’s price dropped by 26% and 44%, respectively. This ominous sign suggests that the asset could be poised for additional declines unless key resistance levels are broken.
Furthermore, Ali pointed out that Dogecoin is still in a downtrend, characterized by lower highs and lower lows. This persistent bearish momentum indicates that the market sentiment has yet to shift in favor of the bulls.
The analyst also noted a significant decline in whale activity on the DOGE network, which may indicate reduced interest from major investors. Whale transactions have decreased by almost 88% since mid-November. A decrease in whale activity can lead to diminished support at critical levels, further exacerbating the asset’s struggles.
Lastly, Ali mentioned that Open Interest has shown a downward trend as well. Data from Coinglass reveals a decline of 3.79% over the past day, with an overall valuation of $2.45 billion. Additionally, Open Interest volume has decreased by 5.52% during the same timeframe, now at $2.39 billion.
A drop in Open Interest generally signifies a reduction in active derivative contracts and is often associated with waning trading enthusiasm or reduced speculative activity. This lack of enthusiasm may contribute to further declines in Dogecoin’s price.
In summary, it seems that Dogecoin’s downtrend could persist based on these bearish indicators.
Source: ambcrypto.com
