Despite staying above the support, DOGE risks another fall. Details here.
- Dogecoin’s price might keep consolidating between $0.12 and $0.15. Old coins are moving in numbers, indicating that price may slide in the short term.
Dogecoin [DOGE] might have lost 12% of its value in the last seven days. But the coin’s price might remain above $0.10 in weeks to come. AMBCrypto discovered this after analyzing the Global In and Out of Money (GIOM) indicator.
GOIM measures the addresses in profit and those dealing with losses. As a result, the indicator might act as on-chain support or resistance for a cryptocurrency.
The larger the number of addresses at a certain price, the higher the cost basis can act as support or resistance.
Price stuck between crucial levels
According to IntoTheBlock, Dogecoin was trading above an on-chain support. At that point, holders purchased 45 billion DOGE at an average price of $0.11.
Therefore, this was a strong demand area, and could prevent DOGE from sliding below the aforementioned price.
However, the cryptocurrency might find it challenging to surpass $0.16. This is because many addresses purchased 20 billion coins at the levels, and are holding at a loss.
Source: IntoTheBlock
Hence, if DOGE moves higher, and hit $0.16, a further uptrend could be rejected as some holders might decide to sell and break even.
Going by the condition, Dogecoin’s price might keep swinging between $0.12 and $0.15 in the short term. Furthermore, AMBCrypto evaluated the sentiment around DOGE using data from Santiment.
At press time, the Weighted Sentiment was -0.552. Weighted Sentiment measures the positive/negative comments online about a project.
No gain in sight for the coin
A positive reading of the metric implies that the perception about the project is optimistic. But since the reading was negative, it implies that market participants are not convinced about the bullish potential of the memecoin.
Should the reading remain negative, demand for DOGE might remain low. Therefore, the price of the coin might keep consolidating.
However, if buying pressure increases, Dogecoin might rally and break above the $0.16 resistance. But in a highly bullish scenario, the price might plunge to $0.12.
Source: Santiment
In addition, we observed that the Mean Coin Age (MCA) increased. According to Santiment, the 90-day Dogecoin MCA has jumped to 44.27.
By definition, the MCA is the average age of all coins on the blockchain. If the metric falls, it implies a rise in the number of new coins accumulated.
However, a high coin age indicates that old coins were moved. In most cases, it means that the coins could be sold. As with Dogecoin, the state of this metric, if sustained, could drive the price down.
Source: Santiment
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At press time, DOGE changed hands at $0.14. While the price might increase in months to come, the short-term outlook seems gloomy.
Therefore, it might not be in the best interest of traders to open long positions for DOGE.
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