The price of Dogecoin (DOGE) has surged by 27% in the last month, leading the gains in the meme market. Notably, despite this significant price increase, an important on-chain metric suggests that the meme coin is still undervalued, creating a buying opportunity for market participants.
If demand continues to rise, Dogecoin’s price could further extend its gains in the near future. Here’s why.
Dogecoin Signals a Buying Opportunity
Dogecoin’s market value to realized value (MVRV) ratio, which indicates the overall profitability of all its holders, currently shows that the altcoin is undervalued. This is notable even with the 27% rise in its price this past month.
As of now, the coin’s 60-day MVRV ratio stands at -8.18%. A negative 60-day MVRV means that Dogecoin’s current market price is below its average price over the last 60 days.
Read more: Dogecoin (DOGE) Price Forecast 2024/2025/2030
Historically, negative MVRV ratios indicate a buying signal, suggesting that the asset is trading below its historical acquisition cost and creating a chance for traders to “buy low” and “sell high.”
Traders have responded to this bullish signal, as DOGE’s spot market recorded its first net inflow in a week. According to Coinglass, the market inflow for the meme coin reached $2 million on Friday, following seven days of consecutive net outflows exceeding $35 million.
A spot inflow is a positive signal, indicating that investors are optimistic about Dogecoin’s prospects in the mid to near term and are willing to retain it as an asset.
DOGE Price Outlook: This Important Support Level Must Hold
At the time of writing, Dogecoin is hovering around the essential support level of $0.137. With increased inflow into its spot market, bulls are set to defend this level and may initiate an uptrend if demand rises.
The bullish sentiment for the coin is further corroborated by its bull-bear power (BBP) indicator, which gauges the buying and selling pressure in the market. Currently, the BBP is at 0.0033, indicating bullish momentum. A positive BBP suggests that bulls have control over the market.
If the bulls maintain their dominance, they could push Dogecoin’s price towards the resistance level at $0.154. A successful breakout above this level would allow the meme coin to reach $0.172, a peak not seen since May.
Read more: How To Purchase Dogecoin (DOGE) and Everything You Should Know
However, if demand decreases and the support level at $0.137 fails, Dogecoin’s price could experience a significant drop towards $0.112.
Disclaimer
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