Dogecoin (DOGE) faced obstacles last week when it was rejected at the important resistance level of $0.2. Since then, the price has dropped to a local bottom of $0.17. On Monday, Bitcoin surged from $105,600 to a high of $108,915 before falling back to $106,631 at the time of writing.
The recent increase may continue, but the macro context remains bleak as it was last week. Additionally, tensions in the Middle East seem to show no signs of easing. In this gloomy context, the price action of the leading memecoin cannot escape the downward trend when viewed from a long-term perspective.
A recent report highlighted the 'wait-and-see' status of altcoins. The perpetual contract market appears to be preparing for significant volatility. About 70% of altcoins recorded a significant Long bias, while large-cap assets saw 60% of traders leaning towards Long. In fact, the market expects a recovery after last week's 'liquidation flood.'
Should DOGE traders shift to a bullish trend?
Nevertheless, Dogecoin is still perceived negatively by long-term investors.
In a post on X, analyst Ali Martinez stated that the TD Sequential indicator has issued multiple buy signals on Dogecoin's 12-hour chart. However, as mentioned in previous analyses, Dogecoin's higher time frame (HTF) trend still leans bearish.
Increased selling pressure is reflected in the OBV indicator, combined with negative momentum from the RSI and a bearish technical structure, meaning that a breakout above $0.2 will be extremely challenging.
When closely observing the behavior of Dogecoin holders holding for less than six months, it can be seen that a distribution phase is taking place. The average age of coins (representing the average number of days that the entire amount of DOGE has been held at the current address) has been continuously decreasing for over five weeks.
This downward trend indicates that DOGE is being moved out of storage wallets, likely for selling. Additionally, the increase in circulating 'dormant' tokens over the past month also reflects a surge in on-chain activity.
Meanwhile, the 180-day MVRV ratio remains negative, even though this leading memecoin is entering a distribution phase.
This may be a signal for investors to be cautious. Although the TD Sequential indicator and Bitcoin's recovery may prompt traders to open Long positions, long-term investors should still remain vigilant.
