A few weeks ago, the market faced an unexpected downturn that created widespread confusion. During this period, several cryptocurrencies, including Dogecoin (DOGE), saw sharp declines.
DOGE’s price plummeted to $0.083 during the crash. Although the meme coin has since regained value, the question remains: is this recovery here to stay?
According to Santiment, Dogecoin’s recent drop pushed the Market Value to Realized Value (MVRV) Z-Score into negative territory. The MVRV Z-Score measures whether a cryptocurrency is undervalued or overpriced compared to its fair value.
When the score is positive, long-term holders tend to gain more profits than short-term holders, often indicating a bull market. Conversely, a negative score suggests that short-term holders benefit more, signaling a potential bear market.
This pattern last appeared in February. Before that, it occurred in October 2023, when the current bull cycle began, and in June 2022, during a deep bear phase.
However, at the time of writing, the MVRV Z-Score has returned to negative territory, suggesting that Dogecoin may be primed for another bull run.
Additionally, data from IntoTheBlock indicates that the Bulls and Bears indicator aligns with this outlook. In this context, bulls are addresses that purchased at least 1% of the trading volume, while bears are those that sold a similar amount.
Currently, on-chain data shows more bulls than bears. If this trend holds, Dogecoin’s price could see a more substantial increase in the near future.
On the weekly chart, BeInCrypto observed that Dogecoin is on the brink of breaking above the descending triangle. This triangle is generally considered a bearish pattern formed by a falling upper trendline and a horizontal support level.
Typically, if the price of an asset falls below the support level, the trend is bearish. But for DOGE, it appears to be breaking above the 78.6% Fibonacci retracement level.
The 78.6% Fib level indicates prices that could precede another target. From the chart below, DOGE’s price could hit $0.16 in the mid-term (the 61.8% golden pocket ratio). If successfully broken above, the coin price might jump toward $0.22 in the long term.
However, this long-term prediction might be invalidated if the broader market collapses into a bear cycle. If this is the case, Dogecoin’s price could slide to $0.049.
