Recent data from IntoTheBlock suggests that there has been a significant 41% increase in large Dogecoin [DOGE] transactions in the past 24 hours. Traditionally, a rise in such transactions is seen as a signal of accumulation, potentially leading to a reversal in prices.
Furthermore, insights from the blockchain analytics company indicate a 34% spike in the number of active daily addresses for Dogecoin.
These statistics collectively point towards growing market interest and activity around the memecoin. Consequently, CryptoCrypto has conducted an assessment of the overall market sentiment towards DOGE to identify any potential signs of a bullish trend reversal.
DOGE’s Conflicting Indicators
According to Santiment data, social media activity related to Dogecoin saw an increase between January 13 and 21, followed by a slight dip over the weekend, suggesting a temporary decrease in interest across various platforms.
The overall sentiment, based on weighted metrics, leaned towards the negative side, reflecting a cautious attitude among traders ahead of the upcoming FOMC meeting at the end of January.
Despite the bearish signals, as indicated by some metrics, such as social volume and sentiment, the surge in whale transactions suggests a contrasting view. These mixed signals might imply that Dogecoin could trade within a range until the Fed announces its rate decision.
At the same time, the 30-day MVRV ratio has dropped into negative territory, indicating that Dogecoin may be undervalued, presenting an opportunity for potential gains in the future. Moreover, a significant number of top traders on Binance are currently holding long positions on Dogecoin, adding weight to the expectation of a price recovery.
However, there could be a more attractive buying opportunity in the demand zone above $0.32 (cyan color). Dogecoin has been fluctuating between $0.32 and $0.40 since late December.
With the CMF (capital inflows) now falling below the neutral level, a retest of the lower end of the range might be in the cards soon.
Another development to consider is the speculation surrounding a Dogecoin ETF, with Bitwise being the latest entity to apply for approval. Some experts, including Ali Martinez, believe that if approved, this could propel Dogecoin to $15. Nonetheless, the market sentiment remains divided on whether the SEC will give the ETF the green light.