Over the past 48 hours, there has been a notable increase in whale activity surrounding Dogecoin [DOGE], with more than 200 million tokens being amassed. This surge in demand has reignited enthusiasm among investors regarding the potential breakout of DOGE.
Currently, DOGE is valued at $0.3854, marking a 1.61% rise in the last 24 hours. The accumulation by whales often serves as an early signal of significant price movements, leading to expectations of a bullish trend in the coming days.
Will History Repeat Itself in the Bull Run Cycle?
An analysis of DOGE’s price history indicates that in January 2021, the meme-inspired coin experienced a substantial surge following a 56% decline. Presently, Dogecoin appears to be undergoing a 46% pullback, mirroring a pattern similar to the previous cycle.
Historical data suggests that such corrections tend to pave the way for subsequent price surges, particularly during bullish periods. Hence, should the cycle replicate itself, DOGE might witness a significant upward movement as early as the following week, with key resistance levels at $0.40 and $0.50.
Predicting DOGE’s Price Action
DOGE’s price behavior aligns with a classic cup-and-handle formation, a reliable pattern indicating a bullish trend. The recent breakout has propelled DOGE closer to the critical resistance level at $0.40, potentially setting the stage for a push towards $0.50.
However, a slowdown in momentum could prompt a retracement towards the $0.30 support level, creating an opportunity for buyers to intervene. Therefore, the upcoming days will be crucial in determining DOGE’s ability to sustain its upward momentum.
Increase in Daily Active Addresses Signals Growing Network Engagement
The number of daily active addresses for Dogecoin is currently hovering around 80,000, indicating heightened user activity and network involvement. This uptick reflects growing interest, as enhanced activity levels typically correlate with improved price stability.
Furthermore, continuous growth in network engagement may attract more investors, bolstering DOGE’s bullish outlook. Conversely, a decline in activity could dampen investor confidence and decelerate the momentum.
The Significance of MVRV Ratio for DOGE Holders
With an MVRV ratio of 161.66%, DOGE holders are currently holding substantial unrealized gains. While this implies the possibility of profit-taking, the accumulation by whales and increased activity levels could mitigate selling pressures.
If DOGE manages to sustain its current momentum, the accrued profits might incentivize long-term holding strategies. Therefore, monitoring the MVRV ratio will be crucial in assessing DOGE’s performance in the days ahead.
Preparing for the Next Breakout – Is DOGE Ready?
Considering the robust whale activity, bullish price trends, and growing network engagement, Dogecoin appears well-positioned for an impending breakout. Surpassing the $0.40 resistance level could pave the way for DOGE to target $0.50 and beyond in the short term.
Will this meme coin finally deliver a sustained rally? The forthcoming weeks will unveil the answer.