Dogecoin Risks Big Drop as Key Indicator Flashes Major Bearish Signal

Dogecoin Faces Potential Decline as MVRV Ratio Falls

Dogecoin's Market Value to Realized Value (MVRV) Ratio has dipped below its 200-day moving average (MA), a trend known as the "death cross." Historically, this pattern has preceded significant price declines.

In the past, such events have led to a 26% and 44% loss in Dogecoin's value. Analysts are therefore concerned about the potential for another sharp decline in the coming weeks.

MVRV Ratio Signal Weak Selling Pressure

The MVRV Ratio measures the profit or loss realized by Dogecoin holders. Its recent drop below its long-term trendline suggests increased selling pressure as investors sell to avoid further losses.

Dogecoin's Current Risk

Dogecoin is currently trading at around $0.268, with an MVRV Ratio of 78.36% and a 200-day MA of 91.01%. The widening divergence between these figures aligns with previous downturns, raising concerns about a potential price correction.

Can Dogecoin Recover?

Despite Dogecoin's previous price surges, on-chain data suggests caution. The MVRV Ratio's recent drop indicates potential downward pressure.

Unless demand increases, Dogecoin's weak technical structure suggests a bearish phase is likely. Volatility is expected, and the coming days will be crucial in determining whether Dogecoin can reverse its trend or face another significant drop.

According to historical patterns, the path ahead could be challenging for Dogecoin.