Dogecoin’s Potential Decline Due to Large Transaction
Dogecoin could face a further decline in price after a $7.90 million transfer to Robinhood sparked speculation that the coins would be sold off. This could potentially lead to a drop in Dogecoin’s value, which has already seen a 13.99% decrease in the last 30 days.
Decreasing Active Addresses and Spiking Social Dominance
On-chain data from Santiment reveals a decline in the number of active addresses on the Dogecoin network. This decrease suggests that market participants are no longer as bullish as they were a few days ago.
However, despite the decline in active addresses, Dogecoin’s Social Dominance has risen significantly. This increase indicates that there are many conversations and discussions online about Dogecoin.
Possibility of Price Drop and Market Recovery
While the spike in Social Dominance may indicate market interest, historically, a jump like this has led to a downward trend in Dogecoin’s price. Therefore, there is a possibility that the price could drop from $0.08 in the short term. However, if the broader market recovers, Dogecoin might be able to sustain its current level or even trade higher.
Rising Volatility and Bullish Momentum
Dogecoin’s technical analysis reveals that the Bollinger Bands have expanded, indicating high volatility and the potential for significant price fluctuations. The analysis also suggests that Dogecoin’s price could hit $0.088 if the bulls continue to buy the coin.
Another indicator, the Chaikin Money Flow, currently in negative territory, may soon climb into positive territory, confirming Dogecoin’s bullish trend. However, if the Chaikin Money Flow remains negative, Dogecoin could continue to trade sideways.
Caution for Traders Opening Long Positions
Traders should exercise caution before opening a long position in Dogecoin. The Supertrend is currently above Dogecoin’s price, which may indicate a sell signal. However, if the Supertrend falls below Dogecoin, it could be a buy signal and potentially lead to profit for long position traders.
Analyst comment
1. Negative news – Dogecoin’s potential decline due to large transaction.
As an analyst, it is likely that the market will react negatively to this news as it may lead to a further drop in Dogecoin’s value.
2. Neutral news – Decreasing active addresses and spiking social dominance.
The decline in active addresses suggests a decrease in bullish sentiment, but the increase in social dominance shows continued interest and discussions. The market could go either way.
3. Negative news – Possibility of price drop and market recovery.
The potential for a price drop in the short term may cause concern among investors. However, if the broader market recovers, Dogecoin could potentially sustain its current level or even trade higher.
4. Positive news – Rising volatility and bullish momentum.
The expanded Bollinger Bands indicate high volatility, which could result in significant price fluctuations. The bullish trend suggested by the Chaikin Money Flow may lead to a price increase. However, if the Chaikin Money Flow remains negative, Dogecoin could continue to trade sideways.
5. Neutral news – Caution for traders opening long positions.
The Supertrend indicator may indicate a sell signal, cautioning traders against opening long positions. However, a potential buying opportunity may arise if the Supertrend falls below Dogecoin’s price. The market outcome depends on the specific movements of the Supertrend indicator.
