Dogecoin Market Analysis

• Dogecoin exhibited a bearish market structure.
• On-chain metrics indicated a buy signal for the memecoin.

Dogecoin (DOGE) has been on a downward trajectory since December, failing to gain bullish momentum following its inability to convert the $0.36-$0.38 range into support over the last month. As of February 17, the token has dropped 13%, approaching a critical support level at $0.215.

Will Dogecoin Present a Buying Opportunity?

Initially, the daily chart showed a bearish market structure, which changed at the end of January when prices dipped below the swing low of $0.305, unable to hold the 50% retracement level. Currently, DOGE is nearing the 78.6% retracement level at $0.215. In the March 2024 rally, the $0.2 and $0.215 levels offered significant resistance; their retest as support is favorable for bulls.

However, any weakness in Bitcoin (BTC) could adversely affect the altcoin market.

According to data from Santiment, recent losses have created favorable buying opportunities for the mid-term. Analyzing Mean Coin Age (MCA) and MVRV ratios over the last three months reveals a steady MCA uptrend. The MVRV ratio stands at -31%, its lowest in three months, indicating significant average losses for Dogecoin holders.

The rising MCA suggests accumulation, and the scarcity of DOGE transactions in recent months explains the MCA trend, reflecting bullish sentiment. These factors combined provide a buying signal for the token.

Supply distribution data shows accumulation among holders, except for individuals holding over 100 million DOGE. The cohort holding 100k to 10M DOGE has grown steadily over the past month, though not as quickly as smaller holders.

Despite the annual issuance of five billion DOGE causing slight inflation, the increase in holder numbers in February indicates rising demand, potentially aiding Dogecoin’s recovery.