DogeCoin Predicted to Rally Despite Short-Term Volatility, Trading Volume Rises
The Essentials at a Glance
Dogecoin (DOGE), the popular cryptocurrency that originally started as a joke, is showing signs of an impressive price rally. A recent analysis suggests that movements of previously inactive coins could drive up the price of DOGE. However, before there is another increase, the price could fall in the short term. Here you will learn when to expect profits and which factors influence this development.
The Revival of the “Sleeping”
According to an on-chain analysis, the Mean Dollar Invested Age (MDIA) of DOGE has changed, which had a significant influence on the price increase. A rising MDIA usually indicates that coins are becoming inactive, which can increase price pressure. However, since the end of February, the MDIA of DOGE has fallen, especially on March 21, when a sharp decline was recorded. This suggests that previously inactive addresses have started to move a large amount of coins, which typically leads to a price increase.
Interest and Volume are Increasing
Dogecoin’s trading volume is another indicator of growing interest in this cryptocurrency. On March 31, the volume was at 2.03 billion, but rose to 3.07 billion. An increasing volume shows that buying and selling interest is increasing. However, the price of DOGE could fall in the short term, as the volume increased during the price decline, indicating that the decline was well supported.
Technical Perspective and Buying Opportunities
From a technical point of view, DOGE could temporarily fall below the support of $0.20, with a potential decline to about $0.18. However, indicators such as the supertrend suggest that there could be buy signals between $0.18 and $0.19. This provides an opportunity to accumulate before the next uptrend. The Relative Strength Index (RSI) suggests that sellers are taking profits, which could lead to a further decline in the short term. However, if the bulls return, DOGE could aim for new annual highs.
Our Assessment
The current development of Dogecoin shows how dynamic the crypto market is and that even “meme-based” cryptocurrencies can offer serious profit opportunities. The movement of previously inactive coins and the increasing trading volume are positive signals that could indicate an upcoming price rally. However, investors should be cautious and keep an eye on short-term volatility, which could represent a good buying opportunity before DOGE unfolds its full potential. As always, it is important to conduct your own research and base investment decisions on a solid foundation.
Sources: Santiment, TradingView
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