Dogecoin rides the Bitcoin wave, rallies to 2-year high

• DOGE’s price increased by over 30% in the last 24 hours.
• It exchanged hands at a two-year high at press time.

The value of leading meme coin Dogecoin [DOGE] rose 33% in the past 24 hours to trade at a two-year high at press time.  According to data from CoinMarketCap, the coin exchanged hands at $0.12 as of this writing. The last time DOGE traded at this was on 11th February, 2022.

This double-digit uptick in DOGE’s value highlighted the historical correlation between the coin and leading crypto Bitcoin [BTC], whose value also surged to a three-year high on 28th February.

Per IntoTheBlock data, the coin rallied above the $63,000 price mark to put 99% of addresses holding it in profit. 

Dodge the losses while you still can

AMBCrypto’s readings of DOGE’s performance on a daily price chart revealed that the recent rally might be short lived.

Suggesting that the meme coin was significantly overbought at press time, its Relative Strength Index (RSI) and Money Flow Index (MFI) were spotted at 88.04 and 87.79, respectively.

At these momentum highs, buyers’ exhaustion is common, resulting in a price correction.

While it signaled the presence of strong bullish sentiment in the market, the sharp rise observed in DOGE’s RSI and MFI suggested the possibility of significant price swings.

This was confirmed by the wide gap that existed between the upper and lower bands of the coin’s Bollinger Bands (BB) indicator at the time of writing.

When these bands widen in this manner, it suggests heightened volatility in the market and a potential price correction in the short term.

DOGE’s Average True Range (ATR) – which measures market volatility by calculating the average range between high and low prices over a specified number of periods – confirmed the likelihood of fluctuations in the meme coin’s price in the short term.

At 0.07 at press time, DOGE’s ATR rose by 70% in the past two days.  When ATR surges in this manner, price swings are becoming more significant.

Source: TradingView

Backed by no real demand

A look into DOGE’s network activity revealed a decline in new demand for the meme coin in the last week. According to data from IntoTheBlock, the daily count of new addresses created to trade the coin plummeted 13% in the last week.

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Similarly, the daily active address count dropped by 12% during the same period. 

The period under review also saw a growth in DOGE’s Zero Balance Addresses. These are addresses that have transferred out all their coins. In the last seven days, this increased by 20%.