Dogecoin Price Faces Further Decline After Dipping Below Critical Support Level

• Dogecoin falls below a critical support line.
• Bearish market sentiment continues to hamper DOGE.
• Notable decline in investor confidence as key metrics exhibit bearish trends.

Dogecoin (DOGE) struggles as it falls below crucial support levels, signaling more potential downward price action amid wavering investor confidence.

Dogecoin Faces New Setbacks

Data from CoinMarketCap indicates that Dogecoin’s price plummeted over 11% in the past week, accentuated by a 4% drop in the last 24 hours alone. At the moment, DOGE is trading at $0.119, sporting a market capitalization exceeding $17.2 billion.

COINOTAG analyzed recent metrics to gauge the situation further, finding that 72% of Dogecoin investors were still in profit, but confidence is waning. This was evidenced by the noticeable drop in their average balance to $2.6K, hinting at expectations of a further price fall.

Current Market Sentiment and On-chain Data

Our further analysis of the memecoin’s on-chain data, including metrics from Santiment, brought to light Dogecoin’s sharply declining MVRV ratio over the past week. This descent marks a bearish outlook on the coin.

Moreover, Dogecoin’s Daily Active Addresses have fallen after a spike observed on June 20, showcasing diminished user engagement. The Weighted Sentiment metric also remains negative, reflecting the prevailing bearish mood within the market.

Technical Analysis and Future Outlook

Assessing Dogecoin’s daily chart offers additional insights. The Chaikin Money Flow (CMF) indicated a downward trend, suggesting more downside risks. Nonetheless, the Relative Strength Index (RSI) is nearing the oversold territory, potentially increasing buying interest and lifting the price. The MACD indicator displayed the possibility of a bullish crossover as well.

Given these mixed indicators, a trend reversal may be on the horizon. If such a reversal materializes, Dogecoin could first target $0.127. Surpassing this level could see the coin reach up to $0.148 in the ensuing weeks.

Conclusion

In summary, Dogecoin’s recent decline below crucial support levels has unsettled investor confidence, as reflected in key on-chain metrics. While the technical indicators suggest potential further declines, the possibility of a trend reversal exists. Investors should watch for a move above $0.127, which could pave the way for higher levels. However, cautious optimism is recommended given the prevailing bearish sentiment.