With market sentiment remaining stable, two nuanced but significant metrics suggest a possible decline in the price of Dogecoin (DOGE). Last month, DOGE reached $0.11.
Since the start of September, however, the meme coin has consistently traded below this threshold. These metrics provide insights into how the current trend of the cryptocurrency may influence its price.
Dogecoin Experiences Low Engagement and Increased Sell-Offs
The first critical metric to monitor is Dogecoin’s Mean Dollar Invested Age (MDIA). MDIA gauges the average age of all dollars invested in Dogecoin. An increasing MDIA points to long-term holding, suggesting that investors are not selling. Conversely, a decreasing MDIA indicates that more traders are actively selling their holdings, often signaling substantial sell-offs.
The accompanying chart demonstrates a sharp decline in MDIA since September 8, suggesting that less capital is flooding into Dogecoin. This trend could expose Dogecoin’s price to a potential drop below the key level of $0.10.
The second essential yet infrequently referenced indicator is the Address Birth-Death Ratio. As its name implies, this ratio measures the speed at which new addresses adopt a cryptocurrency against the rate at which existing addresses unload their coins.
A high Birth-Death ratio signifies greater adoption of the cryptocurrency compared to the number of exits. However, as of now, the ratio has dropped to 0.11%, indicating that a greater number of DOGE wallets are being retired compared to newly created ones.
Read more: How To Buy Dogecoin (DOGE) and Everything You Need To Know
DOGE Price Forecast: Breakout Invalidated
According to the daily chart, Dogecoin broke through the descending triangle pattern three days ago. Typically, such a breakout signals bullish momentum, which was evident as DOGE’s price attempted to rise further.
Nonetheless, the coin faced rejection as it approached $0.11. The chart below illustrates that DOGE’s price is on the verge of dropping below the 61.8% Fibonacci retracement level.
Read more: Dogecoin (DOGE) vs Shiba Inu (SHIB): What’s the Difference?
If this occurs, it could confirm a bearish outlook, potentially pushing the price down to $0.091. Nevertheless, if bullish traders can maintain the price above this level, the bearish forecast may be invalidated, allowing Dogecoin to rise to $0.12.
Disclaimer
In accordance with the Trust Project guidelines, this price analysis article is intended for informational purposes only and should not be taken as financial or investment advice. BeInCrypto is dedicated to providing accurate and unbiased reporting; however, market conditions are subject to change without notice. Always perform your own research and consult with a financial professional before making any financial decisions. Kindly note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
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