The price of Dogecoin (DOGE) fell for the seventh day in a row. Coin holders are alarmed by the short-term prospects of the popular memcoin
On-chain analysis shows that there is reason to panic. Memcoin Dogecoin (DOGE) is facing a sell-off from current levels.
Dogecoin is under threat
Over the past seven days, the price of the popular memcoin has fallen by almost 14%. Holders are hopeful that a recovery will begin soon, but IntoTheBlock data suggests otherwise. The In/Out of Money Around Price (IOMAP) indicator foreshadows a wave of sales around the $0.11 level.
The metric groups current holders of an asset according to their market entry levels (purchase price) relative to the current price. It determines those who are currently in profit, in the break-even zone and those who are incurring losses.
The resulting groups help identify significant buy and sell zones. These are expected to act as support or resistance levels. The more addresses are in a given price range, the stronger the level.
In the case of DOGE, in the range to the left of the price, 17,960 addresses bought 1.49 billion coins. This potentially prevents a significant drop. However, on the right, 40,200 addresses hold 2.74 billion coins, with a current value of about $300 million.
This key barrier can prevent players in the support zone from starting to recover the price. In this case, DOGE will likely face another bearish move. The next support levels will be between $0.09 and $0.10.
This is confirmed by the market to realized value ratio (MVRV) indicator. The MVRV ratio provides an indication of the level of unrealized profit or loss. High readings indicate large unrealized gains, suggesting a possible increased desire to sell. Low values indicate unrealized losses, indicating a potential desire to hold the asset.
However, historical data also indicates levels at which prices may rebound. At the time of writing, Dogecoin's 30-day MVRV is -7.26%. Historically, DOGE price tends to recover when this metric is between 9.53% and 21.88%. Thus, if the situation repeats itself, DOGE holders will likely face a new round of unrealized losses.
DOGE Price Prediction: Recovery May Be Difficult
The daily chart shows that DOGE began to decline on July 27 after the price initially bounced off $0.13. Since then, the coin has lost 17.55% of its value. Additionally, the 50- and 20-day exponential moving averages (EMAs) paint a negative picture. Currently, the longer 50 EMA (yellow) is moving above the 20 EMA (blue), indicating a bearish trend.
If the situation continues, DOGE may continue to trade around $0.11, and if sales intensify, it may drop to $0.09. However, if the shorter EMA does exceed the longer one, we will get a golden cross. Then the DOGE trend will change to bullish. In this case, the price may rise to $0.12 or $0.13.
Analyst Javon Marks suggested that Dogecoin could make a powerful bullish breakout later in the cycle.
“Based on the previous two breakouts, each of which was larger than the previous one, if this repeats, we can expect price growth to levels above $10 and a bull run of >7,200%,” Marks wrote.