- Bearish sentiment around Dogecoin increased in the market.
- Most market indicators looked bearish on the meme coin.
Dogecoin [DOGE] caught investors off guard a few days ago as its price surged by more than 10%.
However, the trend did not last long, as the meme coin soon witnessed a price correction, neutralizing its weekly gains. Meanwhile, one of the blockchain’s key metrics skyrocketed.
Dogecoin loses its weekly gains
A few days ago, Elon Musk launched the official Payments account for X (formerly Twitter). This sparked excitement in the community, causing DOGE’s price to surge.
However, AMBCrypto reported earlier that the hype around XPayments might not be enough for Dogecoin to sustain the price uptrend. That turned out to be true, as the meme coin’s price plummeted.
According to CoinMarketCap, DOGE was down by nearly 4% in the last 24 hours alone. At the time of writing, DOGE was trading at $0.08031 with a market capitalization of over $11.4 billion.
Though the meme coin’s price action was bearish, one of its key metrics has remained high for multiple months now.
IntoTheBlock recently posted a tweet highlighting how Dogecoin’s number of transactions remained high compared to several other top cryptos, such as Shiba Inu [SHIB].
One could argue that the memecoin wars aren't about utility. Nonetheless, Dogecoin's dominance in the number of transactions is unmistakable. #Doge pic.twitter.com/kE4wW5IrmY
— IntoTheBlock (@intotheblock) January 22, 2024
Will network activity be enough to help DOGE recover?
AMBCrypto’s analysis of Dogecoin’s metrics revealed that a high transaction count might not be just enough for the meme coin to recover from its losses.
DOGE’s Social Volume remained high last week, thanks to its high price volatility.
However, bearish sentiment started to increase, which was evident from the drop in its Weighted Sentiment since the 22nd of January.
Source: Santiment
Dogecoin’s liquidation heat map also revealed quite a few interesting points. The meme coin has a critical support level near the $0.079 mark.
This meant that DOGE’s price might fall to that level before it manages to go up.
If the price fails to test this support zone, then investors might witness a further drop in its price.
Nonetheless, considering a utopian scenario, if DOGE’s price moves upward, then it might face strong resistance near the $0.09 mark.
Source: Hyblock Capital
To understand what to expect from Dogecoin, AMBCrypto took a look at its daily chart. Our analysis revealed that the possibility of the meme coin’s price going further down was likely.
Realistic or not, here’s DOGE’s market cap in BTC’s terms
Both its Money Flow Index (MFI) and Relative Strength Index (RSI) registered downticks.
Nonetheless, the Bollinger bands pointed out that DOGE’s price was in a less volatile zone. This hinted that the meme coin’s price might reach its support level and start another rally from that zone.
Source: TradingView
