Dogecoin is in a deep correction phase and may continue to decline in the coming weeks.
On-chain indicators show signs of accumulation and undervaluation; investors may consider buying more DOGE.
Dogecoin continues to decline amid a volatile cryptocurrency market.
Dogecoin (DOGE) continues to face downward pressure amidst the cryptocurrency market's efforts to regain stability after a period of high volatility last weekend. Bitcoin (BTC) established a significant downward pattern on Thursday or Friday, fluctuated over the weekend, and began to recover on Monday, starting May 23.
After three weeks of this pattern repeating, it is likely that Monday will continue to see a recovery. If so, Dogecoin may also start to recover. However, at this moment, price action still leans towards a downward trend.
Source: DOGE/USDT on TradingView
The current market structure is still entirely bearish, with DOGE trading below the 78.6% Fibonacci retracement level. These levels are established based on the strong rally at the beginning of May. DOGE also recorded a liquidity cluster at the short-term bottom around $0.17; there is a high possibility that the price will continue to test this level before recovering.
Some on-chain indicators suggest buying potential, however, active selling volume on the OBV indicator shows that sellers still dominate.
Buy signal for DOGE investors, but volatility remains high.
Source: Glassnode
The Network Value to Transactions Signal (NVTS) index is an improved version of the NVT ratio, using market capitalization and daily on-chain transaction volume to assess whether an asset is overvalued or undervalued based on network usage.
The current NVTS variant applies a 90-day moving average of transaction volume, making this index serve as a more effective leading indicator. Currently, DOGE's NVTS index is below the levels of May-June 2024.
This could be a positive signal for investors, as this Meme Coin is undervalued and opens up appealing buying opportunities.
Source: Glassnode
The net position change index on exchanges has shifted to a negative state since early June. Earlier this year, this index also showed a similar trend. This could be indicative of an accumulation process, as DOGE is being withdrawn from exchanges and the available DOGE for sale decreases.
However, a negative net position does not guarantee that a price increase will happen immediately. Conversely, DOGE has previously extended declines for three consecutive months despite accumulation signals appearing earlier this year.
Traders should be cautious and may expect DOGE to retest the $0.17 area in the coming days, potentially even declining further. Long-term investors may start considering buying opportunities and applying strategies like dollar-cost averaging (DCA) to optimize their portfolio.
Conclusion: The outlook for Dogecoin remains promising but needs close observation.
Dogecoin is in a short-term downtrend but is supported by accumulation and undervaluation indicators from on-chain.
The price is at risk of retesting the $0.17 level before recovering or establishing a new bottom.
This is an appealing opportunity for long-term investors, but a reasonable risk management strategy is needed as volatility remains high.
Source: https://tintucbitcoin.com/dogecoin-cham-lai-bien-dong-sap-toi/
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