Will Dogecoin’s Price Spike Lead to Another Major Dip?

DOGE is trading at 2.92% higher as of press time in the past 24 hours after experiencing a 10.42% decline in the past week. In the past, DOGE has seen rapid price jumps followed by slight corrections. In an X post on Friday, analyst Ali Martinez pointed out a concerning trend and believes DOGE’s recent price movements resemble cycles from 2017 to 2020. 

DOGE Past Cycles and Pullbacks

According to analysts, after sharp price spikes in those years, DOGE’s value dropped for a few days before continuing its rally. Martinez suggests that the current cycle may repeat this pattern, and sell signals on DOGE’s TD sequential indicator often marked the start of these pullbacks.

While DOGE’s price is currently up, several key metrics, such as DOGE’s sell volume, point to a potential reversal. Last week, the metric spiked to 100, indicating a large amount of selling. However, the selling pressure soon cooled as the volume dropped to 12. Despite this, other indicators remain bearish. DOGE’s trading volume has declined while its price has increased, often a sign of a trend reversal.

Declining Whale Activity 

Additionally, DOGE’s Market Value to Realized Value (MVRV) ratio has fallen, suggesting that many investors hold DOGE at a loss. Whale activity has also slowed, with fewer large transactions on the network. The decline in whale transactions could signal less confidence in the memecoin’s price growth. 

Data from the analytical platform Santiment shows that daily active addresses have dropped. This indicates lower usage of DOGE, which could suggest fading interest in the coin. However, there are still reasons for optimism. 

DOGE’s daily chart shows a bullish ascending triangle pattern. This pattern suggests that once the price breaks the resistance level, it may lead to a price rally. Analysts predict that DOGE may rise to $1 if the breakout happens.

The prices of Dogecoin are still volatile as indicated by the presence of both bull and bear signals. The investors should be on the lookout for this memecoin as it may either surge to new heights or plummet again. The following several days will be rather crucial for the further evaluation of DOGE’s potential for the further growth or, on the contrary, the cyclic pattern of price changes.