How far is Dogecoin's next breakout on the chart?
Memecoin volatility hits 30-day low, indicating sideways movement
Other on-chain indicators support this prediction, but DOGE’s price could surge later
If you thought Dogecoin [DOGE]’s 2.60% gain in the past 24 hours was the start of a new rally, you might want to think again. No, this isn’t a sudden opinion either.
On the contrary, AMBCrypto found data to support this argument. The first piece of evidence we found is the volatility of the coin. According to our analysis using IntoTheBlock, Dogecoin’s volatility has reached its lowest point in the past 30 days.
Increased volatility can trigger rapid changes in cryptocurrency prices. This is what meme coins such as DOGE are famous for. However, the drop here means that the extent of price fluctuations is likely to be smaller.
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Keep calm, the pump is not here yet
If this metric fails to rise, DOGE’s predicted $0.25 may not be achieved anytime soon. At press time, DOGE is valued at $0.15.
The altcoin has been fluctuating between $0.14 and a peak of $0.16 for a while now. Going forward, unless changes occur on the Dogecoin network, the consolidation is likely to remain in place.
However, there appear to be other on-chain indicators that also support the idea of lateral movement. For example, active addresses can be used to track user activity on the network.
Historically, surges in Dogecoin activity have been accompanied by significant price increases. As recently as March, when 24-hour active addresses approached 250,000, DOGE’s price rose as high as $0.22 on the charts.
However, at press time, the indicator is reading just 52,400, indicating low network participation. If this holds true over the coming days, DOGE could remain in a tight trading range, as has been the case over the past few weeks.
The dog is not dead
However, despite the bearish outlook, Dogecoin may not fall into a bear market phase. This is the signal AMBCrypto gets from the MVRV Z Score.
MVRV stands for Market Value to Realized Value. This metric measures whether a cryptocurrency is overvalued or undervalued relative to its fair value. After adding the Z-score, it checks whether the market has entered a correction period or the market is bullish.
Negative readings on this indicator indicate a bearish phase. Conversely, if the Z-score is above zero and in the positive territory, the price on the chart is likely to rise.
At press time, Dogecoin’s MVRV Z-score flashes 0.88, suggesting that the coin’s value could rise in the future. However, to validate this bias, the reading must climb above 1.05. Failing that, DOGE could remain between $0.14 and $0.16 on the charts.
On the other hand, a slowly rising Z-score on a chart could signal a price increase that could later prove to be an explosive surge.
