Dogecoin Faces Price Drop as Key On-Chain Metric Turns Bearish

Dogecoin Faces Bearish Signals

Dogecoin, the popular meme cryptocurrency, has encountered concerning bearish signals in its on-chain metrics. Analyst Ali highlighted this development in a social media analysis on February 2, 2025, which garnered significant attention.

Bearish Crossover Signals Potential Decline

According to Ali, Dogecoin's Market Value to Realized Value Ratio (MVRV) has crossed below its 30-day Simple Moving Average (SMA), indicating an overvalued state and potential for a steep price correction.

The MVRV Ratio is a crucial metric that compares the current market price to the average price at which tokens were last moved. A drop below the SMA suggests profit-taking by investors who bought at higher prices.

Recent Price Action

Despite multiple recovery attempts following declines in December 2024 and January 2025, Dogecoin has struggled to hold above key Fibonacci retracement levels. The bearish MVRV shift aligns with this inability to sustain bullish momentum.

Price fluctuations between Fibonacci levels of 76.1% and 140% indicate weak buying pressure and investor hesitation amidst growing bearish sentiment.

Community Reaction

Ali's analysis has sparked concern among Dogecoin enthusiasts and traders. Some expressed apprehensions about the short-term trajectory, while others sought clarification on potential price targets.

Broader Implications

The bearish MVRV crossover could also impact the broader crypto market, particularly among altcoins and meme coins. A sharp correction in Dogecoin could trigger ripple effects across these markets.

Caution Advised

Traders should exercise caution in light of Dogecoin's bearish signals. The cryptocurrency faces downside risks with the MVRV Ratio below the 30-day SMA and prices struggling to regain momentum. Investors are encouraged to monitor key support levels and stay informed about on-chain developments.

Tags:

Altcoin, Crypto market, Currency, Dogecoin ($DOGE)