Dogecoin (DOGE)'s performance in the market, particularly its market value to actual value (MVRV) ratio, repeatedly demonstrates cyclical patterns.
When prices approach historical highs, the MVRV ratio often surges, indicating overvaluation, followed by a retracement. This pattern has occurred multiple times in history, particularly evident during the price fluctuations in early 2014, late 2017, and early 2021.
MVRV ratio's cyclical fluctuations
Historical peaks in the MVRV ratio usually mark the speculative phase of the Dogecoin market, followed by a sharp price decline, entering a retracement phase.
Afterwards, the market entered a consolidation phase, laying the foundation for the next upward trend. Currently, Dogecoin's MVRV ratio is approaching these higher levels again, indicating that the market may be repeating this cyclical pattern.
Current market conditions and resistance levels
Dogecoin is currently in an adjustment phase, repeatedly testing the resistance level around $0.49. Although there have been several attempts to break through, none have been successful.
Each breakout is followed by a retracement, confirming the strength of this resistance level. The current price has retreated to around $0.36, forming a strong demand zone, with signs of a rebound after touching it, indicating accumulation activity.
Technical indicators and short-term trends
The MACD indicator shows that Dogecoin's momentum is weakening, with prices converging below the baseline. If this pattern continues, DOGE may fall below the $0.36 demand zone, potentially rebounding again to continue rising. Based on historical performance, DOGE typically rebounds after reaching a low point, forming upward momentum.
Analysis shows that most Dogecoin holders are currently in a profitable state. According to IntoTheBlock data, approximately 74.19% of DOGE holders are in an 'in-the-money' position, meaning they have been able to profit from price increases most of the time.
In contrast, only 22.20% of holders are in an 'out-of-the-money' position, indicating fewer holders are experiencing losses. Therefore, Dogecoin may be able to maintain or enhance its profitability during future fluctuations.
The cyclical fluctuations of altcoins compared to DOGE's performance
The performance of altcoins like Dogecoin usually exhibits significant volatility peaks compared to Bitcoin, especially during the '3rd wave' and '5th wave' periods, when altcoin seasons typically occur, attracting capital inflows and market interest.
Since the beginning of 2020, the volatility of altcoins relative to Bitcoin has formed a wedge pattern, which has recently been broken, signaling that an altcoin season may be approaching.
From historical trends, Dogecoin may not remain in the adjustment phase for long, but may break through the current highs at some point, potentially soaring to new highs. As market volatility increases, Dogecoin may continue to attract investor attention and possibly generate momentum for the next upward move.
