Dogecoin, the meme-inspired cryptocurrency that took the internet by storm in 2021, has seen a recent uptick in price. However, experts are cautioning investors against mistaking this blip for the start of a moon mission.
DOGE Price Volatility Takes A Vacation
One factor tempering enthusiasm is Dogecoin’s current lack of volatility. While price swings are often a hallmark of the cryptocurrency market, DOGE’s volatility has hit a 30-day low.
This calmness suggests the recent price increase might not translate into a sustained upward trend.
Memecoins like Dogecoin thrive on volatility, and the current lull suggests a period of price stability, which isn’t necessarily bad, but it’s unlikely to trigger the explosive rallies we’ve seen in the past.
Source: IntoTheBlock
Dogecoin Network Activity: Apathy Or Accumulation?
Another dampener on the celebratory champagne showers is the low user activity on the Dogecoin network. The number of active addresses, which indicates user engagement, is currently hovering around 52,000.
This is a significant drop compared to March 2024, when a surge in active addresses coincided with a price jump to $0.22.
Total crypto market cap currently at $2.18 trillion. Chart: TradingView
Historically, spikes in Dogecoin’s user activity have foreshadowed price increases. The current low suggests a lack of excitement or, perhaps, a period of accumulation by investors who are waiting for the right moment to jump in.
DOGE Stuck In Consolidation: A Sideways Serenade Or Coiling For A Leap?
For the past few weeks, Dogecoin’s price has been stuck in a consolidation phase, oscillating between $0.14 and $0.16. This sideways movement, while frustrating for those hoping for a quick return, could be a sign of a different kind of preparation.
Doge price action in the last 24 hours. Source: Coingecko
Consolidation periods often precede significant breakouts. While it doesn’t guarantee a future surge, it suggests the price is finding support and could be coiling for a potential leap.
A Glimmer Of Hope: MVRV Z Score Hints At Undervaluation
A beacon of optimism comes from the MVRV Z Score, an indicator that suggests Dogecoin might be currently undervalued.
This metric essentially compares the market value of a coin to its historical value. A score below a certain threshold suggests the coin might be undervalued and has room for growth.
A Slow Burn Or A Surprise Spark?
The current data paints a picture of a cautious future for Dogecoin’s price. While a major rally seems unlikely in the immediate future, there are underlying hints that suggest potential for growth.
The low volatility and user activity could be signs of consolidation and accumulation, respectively, both of which could precede a future price increase.
Featured image from @inevitable360/X, chart from TradingView