The Dogecoin (DOGE) holder base has become stable during the last few weeks, and its on-chain and price metrics have recently raised red flags for investors. These metrics could soon lead to a 40% correction in DOGE price.
Will the DOGE community be able to hold the line, or is a bearish trend on the horizon?
Dogecoin Number of Holders Remains Stable
DOGE holder base surged by over half a million in just two weeks during February. On February 2, the number of holders reached a new high of 6.5 million, representing a nearly 10% increase from 5.82 million on January 28.
DOGE price followed that growth, from $0.081 to $0.195 between February 10 and March 4. However, the number of holders became stable after all that growth.
Between March 7 and March 12, the number of DOGE holders grew by roughly 100,000, reaching 6.57 million. While 100,000 might seem significant for other coins, this represents a minimal increase of only 0.15%. Recently, DOGE price growth has been strongly correlated with substantial growth in the number of holders. Since this number has stagnated in the past week, it could lead to price stabilization or a correction.
DOGE MVRV Sees Rapid Spike
A dramatic rise in the MVRV Z Score from 0.062 to 1.40 over just two weeks for DOGE signifies a potential case of overvaluation. This is the biggest MVRV Z-Score for DOGE since November 2021. That time after reaching those levels, DOGE price corrected by almost 50% in the next month.
Imagine the MVRV Z-Score as a thermometer gauging how “hot” or overvalued an asset is compared to its historical average price. A score of 0.062 suggests DOGE was slightly on the warm side but not burning up. However, the significant jump to 1.40 indicates the temperature has risen dramatically.
Generally, a high MVRV Z-Score is seen as a sign that a correction might be looming. This means the price could drop to reflect its historical value better. In simpler terms, DOGE might be due for a price decrease based on this metric.
DOGE Price Prediction: Bearish Signs Ahead
Analyzing DOGE Exponential Moving Averages (EMA), it’s clear that recently, the long-term EMA (200 days) crossed above the more short-term EMA lines, the so-called Death Cross. Also, the DOGE price line is currently below the long-term EMA lines. Usually, this suggests a possible downtrend or dominance of bearish sentiment.
However, DOGE has a strong historical correlation with BTC and ETH. If these two coins continue to rise, DOGE price could return to $0.20 and above soon, even with bearish metrics.
Given the stable number of holders and the rise of MVRV Z-Score, alongside the recent move of EMA lines, the DOGE price could test the $0.16 support zone soon. If it’s unable to resist it, it could decline further to $0.12 or even $0.10, a 40% correction.
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