Recently, the popular meme coin, Dogecoin (DOGE), experienced a fall beneath the support level of $0.063, an event that raised several eyebrows in the crypto community. This support level had a history stretching back to March, and its breach could indicate a possible DOGE accumulation hollow. Is this a sign of a potential tumble for DOGE? Or is there more than meets the eye?
DOGE’s Social Presence Versus its Price Action
Despite having a significant social presence last week and even making it to the LunarCrush’s top ten, Dogecoin’s market performance was less than impressive. The social engagement, unfortunately, didn’t translate into increased demand for the coin. This lackluster price action not only discouraged short-term bulls but also raised questions about the solidity of DOGE’s accumulation.
Indicators Signal A Downtrend
On June 14, Dogecoin registered a bearish candle on the daily timeframe, followed by a rally to $0.083 in the succeeding weeks. However, a sharp drop on September 11 plunged DOGE below this zone, causing concern among investors. The Relative Strength Index (RSI) has stayed below the neutral 50 over the past month, indicating a downtrend. Furthermore, the Directional Movement Index (DMI) showed the strength of this downtrend with both the Average Directional Index (ADX) and the -DI above the 20 reading.
Moreover, the Chaikin Money Flow (CMF) witnessed a drop, suggesting a lack of significant capital inflow into the Dogecoin market. This lack of capital inflow, combined with the negative sentiment metric for a month, painted a rather bleak picture for DOGE.
Is There Hope for DOGE Bulls?
Despite these indicators, all hope is not lost for DOGE bulls. The rising mean coin age since June signifies network-wide accumulation of DOGE. The Market Value to Realized Value (MVRV) ratio, despite indicating overvaluation of the meme coin, also suggests that holders could profit from the token in the upcoming weeks.
However, the question remains – is this accumulation substantial enough to keep the bears at bay? Or is the DOGE accumulation hollow merely a facade?
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