Dogecoin price looks historically cheap, but there’s one problem

Dogecoin [DOGE] has been moving sideways for a while, but that could soon change.

Here’s what we know.

Dogecoin drops to rare CVDD undervaluation zone

The memecoin is now trading in one of the weakest areas on its CVDD Channel. This is an on-chain model used to compare price with long-term value trends.

Interestingly, DOGE has only reached this lower zone a few times before. Price went on to move up over the following months.

However, the token could still move lower, and the current level does not confirm a bottom.

This is worth watching because the same part of the CVDD Channel has  appeared near major turning points before. We may be closer to an extreme valuation zone than the price action alone makes it seem.

Dogecoin price is range-bound

On the other hand, Dogecoin’s shorter-term looks fairly uneventful.

DOGE was trading near $0.07 at the time of writing; this comes after several weeks of sideways movement. The RSI was below the neutral 50 level, so buyers haven’t quite taken control yet. The CMF reading was just slightly negative at -0.01, so new capital isn’t coming into the memecoin with strength.

The derivatives market however, is a little more active. Aggregated Open Interest [OI] was close to $501 million, so traders are building positions even during stuck spot price.

Funding was at around 0.0031, so long positions continue to pay shorts.

This leaves DOGE in an interesting position. While on-chain metrics indicate cheap levels, price and momentum indicators can’t confirm a recovery.

What we need is a strong move above the recent trading range, along with improving RSI and money flow. This would make the recovery case more convincing.

Until then, the undervaluation signal is simply something to keep an eye on.

Final Summary

• Dogecoin has entered a rare CVDD undervaluation zone.
• Momentum indicators are weak, so a rebound is not confirmed yet.