If buying pressure picks up, the positive outlook towards Dogecoin will be validated.
- Dogecoin holders are refraining from selling, potentially paving the way for a price increase. Technical indicators suggested a rise in momentum, while on-chain data showed that it was time to buy.
Dogecoin [DOGE] was one of the few memecoins that refrained from joining the broader price increase in the last 24 hours. However, by the look of things, the coin might soon make a move in a similar direction.
Leading this assertion is the Coins Holding Time. Coins Holding Time measures the number of days a coin has been held without any transaction.
HODLing is the name of the game
When most coins are not transacted, it means that selling pressure will be minimal. However, an increase in transaction activity suggests that sell-offs might happen in between.
According to IntoTheBlock, Dogecoin’s Coins Holding Time increased by a staggering 387.03% in the last seven days. This means that holders are sticking to HODLing.
HODL stands for Hold On to Dear Life. In crypto, it describes a situation where market participant decide not to sell irrespective of price fluctuations.
Source: IntoTheBlock
Should this attitude continue, DOGE might experience some stability. If buying pressure accompanies it, the price of Dogecoin might increase.
At press time, DOGE changed hands at $0.12. This was a 20.78% decrease in the last 30 days. In terms of trading volume, AMBCrypto discovered that it was down by 33% within the same period.
The decline in volume alongside the month-long decrease suggests that the downtrend was getting weak. Therefore, it is possible to see DOGE price bounce from the lows.
The time to buy DOGE is now
Now, let’s look at the price potential from a technical perspective. According to the DOGE/USD 4-hour chart, the Awesome Oscillator (AO) had risen to the positive region.
AO is a technical tool that measures momentum. Therefore, the positive reading of the AO suggested that Dogecoin’s momentum was increasing.
Like the AO, the Relative Strength Index (RSI) reading also increased. However, the RSI had not yet risen above the 50.00 neutral zone. Hence, the price might hover around the $0.12 region for some time.
But a break above the point could send DOGE’s price higher. Furthermore, we identified potential price points using the Fibonacci Retracement indicator.
Source: TradingView
The Fibonacci indicator spots potential support and resistance levels. On the chart, we observed that 61.8% Fib level was at $0.13, indicating that DOGE could move toward the area.
In a highly bullish case, the price could rise to $0.15. In addition, we examined the price DAA divergence.
DAA stands for Daily Active Addresses. It measures the number of active users on a blockchain. When put together with the price, the metric can tell when to buy to when to sell a cryptocurrency.
Specifically, an entry signal appears when price grows more than the DAA. On the other signal, the metric indicates that it is time to exit if DAA grows more than price.
Source: Santiment
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At press time, Dogecoin’s price DAA divergence was -79.13%. This indicates that participation rate on the network is lower than price growth.
Thus, it could be time to buy the coin before the potential upswing begins.
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