Recent trends in the Dogecoin market have shown a positive outlook for the popular cryptocurrency. Over the last few weeks, Dogecoin (DOGE) has consistently traded above its 200 EMA, indicating a strong upward momentum in its price.
This upward movement has sparked conversations among Dogecoin enthusiasts, with many analysts predicting a potential uptrend in the near future.
Analysis of Current Market Sentiment
One analysis pointed out that the price action of DOGE is resembling the ‘Reversal Box’ pattern that was observed in 2020.
As a result, Dogecoin has established three higher lows and successfully broken through significant resistance levels.
Historically, when Dogecoin forms a Reversal Box pattern, it often signifies the end of a period of stagnation and the start of a potential bullish rally.
Therefore, the formation of higher lows suggests a weakening selling pressure and an increasing dominance of buyers in the market.
In 2020, when a similar pattern emerged, Dogecoin witnessed a substantial increase in value. For instance, in late 2020, DOGE surged from $0.0023 to $0.00048, representing a significant gain. It also experienced a remarkable spike from $0.006 to $0.088, marking a gain of 1366.67% within the same year.
These historical patterns set the stage for a major bullish run for Dogecoin in 2021 that led to an all-time high.
If history repeats itself, Dogecoin could potentially see a significant surge as observed in 2020.
Examining DOGE’s Price Movement
While the CEO’s analysis provides a positive outlook for Dogecoin, it is essential to consider other market factors to gauge the potential for a rally.
One crucial factor to analyze is the active addresses in the Dogecoin network, which have shown consistent growth over the past month. Currently, DOGE has recorded a monthly high of 764.84k active addresses, indicating strong participation and demand for the cryptocurrency.
Furthermore, the MVRV Long/Short difference ratio of Dogecoin has been increasing steadily over the past month, from a low of -17.13 to -7.76 at present. This uptrend suggests that long-term holders have confidence in the future value of DOGE. As a result, when short-term holders sell off, it could pave the way for a price rally.
Additionally, there has been a significant uptick in large holder inflow over the last week, rising by 358.64% from 252.92 million to 1.16 billion. This influx of funds indicates growing investor interest in Dogecoin, anticipating further price appreciation.
Future Prospects for Dogecoin
At the time of this writing, Dogecoin was trading at $0.1396, showing a slight 3.5% decline in the past day.
However, the overall trend has been positive, with the memecoin recording a 30.45% increase over the last month.
Considering the favorable market conditions highlighted by these indicators, Dogecoin appears to be well-positioned for potential gains in the near future.
If the current market conditions persist, DOGE could be on track to reach $0.1658 in the short term.