During the last month, Dogecoin [DOGE] has witnessed a remarkable surge, reaching a yearly peak of $0.43.
Within this timeframe, the meme-based cryptocurrency has seen an impressive 234.72% increase, combined with a 91.97% surge on the weekly charts.
Nevertheless, recent price movements have raised concerns about a possible downturn, with DOGE experiencing a 9.67% decline on daily charts. Analysts are now contemplating the next course of action.
Among these analysts is Ali Martinez, who has proposed that Doge’s upward trend remains intact as long as the $0.35 support level remains unbroken.
Sentiment in the Market
Martinez has suggested that in shorter time frames, DOGE seems to be forming a bullish flag pattern.
When an asset forms a bull flag, it signifies a potential continuation of its upward trajectory.
As per Martinez’s analysis, the maintenance of the $0.35 support level is crucial for validating the bull flag and confirming the optimistic outlook.
Once this validation occurs, Dogecoin is anticipated to climb by 45% towards the $0.56 mark. Therefore, sustaining the $0.35 support level is imperative for further upward movement.
Interpreting Price Charts
While Martinez’s analysis paints a positive picture, it is vital to cross-reference other metrics to ascertain their indications.
Initially, Dogecoin’s NVT Ratio (adjusted for circulation) has dropped from 582.06 to 111.03 over the past month. A diminishing NVT Ratio suggests heightened real-world utilization and adoption of the network.
This trend is viewed favorably, as robust network usage and transaction volumes support price appreciation based on genuine utility rather than speculative activities.
Furthermore, Dogecoin’s MVRV long/short difference has climbed to 62.82% in the last month. Such an increase commonly reflects a positive sentiment, particularly when the market is on an upward trajectory.
Under these circumstances, it indicates that long-term holders have confidence in the market and foresee potential price growth.
Thus, the market seems poised for a continuation of the current uptrend. This perspective suggests that the decline seen on daily charts might simply be a correction before another attempt at an upward movement.
In essence, the prevailing market conditions bode well for DOGE and could result in further price gains for the meme-inspired cryptocurrency. If this optimism persists, Dogecoin might reattain the $0.44 level and encounter the subsequent resistance at $0.48.