Despite earlier this week’s over 30% gain, analytics platform Santiment claims that Dogecoin (DOGE) still has further upside potential.
According to Brian Quinlivan, director of marketing at Santiment, Dogecoin’s market value to realized value (MVRV) for the previous 30 days is below the “danger zone,” suggesting that the popular joke coin still has some room for growth.
The larger the MVRV, which measures the difference between the current price and the average price, the more likely it is that the asset will experience selling pressure.
We can see that the 30-day MVRV is now resting at +11% when it comes to typical trading returns. Typically, a “danger zone” is reached when cryptocurrencies reach +20% or greater. Even with the enormous Elon-induced price jump, there may still be some further room for prices to grow higher because they didn’t quite get that high.
Quinlivan cautions that with the current surge, there are signals that the meme coin may have reached a local high. These include an increase in three metrics: the number of active addresses and circulation of Dogecoin, trading and transaction volumes, and whale transactions.
“It’s a pretty solid bet that a local top is almost always forming here,” the author writes. “Taking profit yourself is a wise decision when these three metrics all spike together during a time when the asset is going on a decoupled surge independent from the rest of the markets.”
The marketing director at Santiment agrees that Dogecoin’s price movement following this week’s rise lacks confidence. “However, looking at this chart, it’s difficult to get overly enthused about the fact that we’re suddenly observing a little break in the connection, with ‘lower highs’ being repeatedly set even in the hours after yesterday’s pump. A far more reliable sign that a larger rally is about to start is “higher highs.”
