Dogecoin (DOGE) Faces More Losses as Indicators Flash 30% Drop Warning

Key Takeaways

• Dogecoin’s Realized Cap has fallen significantly from December’s peak, indicating a bearish trend.
• The price DAA divergence remains in the negative region, reducing the rebound chances.
• DOGE has formed a bearish flag, with indicators supporting a further decline below the $0.20 mark.

Dogecoin (DOGE) has lost 25% of its value over the past month, catching many long-positioned traders off guard as they anticipated multiple rebounds.

While some cryptos in the market have shown signs of recovery, Dogecoin’s outlook appears more uncertain. In the last quarter of 2024, the memecoin was one of the market’s top performers.

However, after failing to sustain those gains and eradicating the possibility of a quick $1 valuation, indicators suggest its decline may not be over just yet.

Dogecoin Sees Rising Distribution

At press time, Dogecoin’s price trades around $0.25, a large decline from the $0.48 peak it reached in December. During that period, the Realized Cap was one metric keeping DOGE’s price in an uptrend.

The Realized Cap estimates a cryptocurrency’s true economic weight by assessing the price at which each coin last moved. Historically, when the reading increases, it indicates a notable accumulation phase that could precede a price increase.

As seen below, the metric was $2.48 billion on Dec. 17. Around the same period, DOGE traded at $0.40. However, as of this writing, Dogecoin’s Realized Cap has dropped to $37.51 million.

This indicates rising distribution around the memecoin. By the look of things, the metric is unlikely to experience a significant bounce from this point. As such, this could keep Dogecoin’s price suppressed and below key resistance levels.

Sell Signal Appears

Further, like the Realized Cap, the price Daily Active Addresses (DAA) divergence supports the bias the DOGE’s price is unlikely to rebound.

Typically, positive values of the price DAA indicate a lot of interaction with the cryptocurrency and are a bullish sign. However, in Dogecoin’s case, that is not the situation.

According to Santiment, the divergence in memecoin’s price DAA has remained negative. At 138.56%, the metric indicates a dearth of user participation with DOGE, which is bearish

Should this remain the same, Dogecoin’s price risks succumbing to another round of extended correction.

Interestingly, some analysts also agree with the thesis. For instance, pseudonymous analyst Trader Tardigrade mentioned that the memecoin could keep trading within a tight range before any breakout.

“Dogecoin has entered the “Boring Phase” Expect tight consolidation at the current level over the next few weeks before the massive Doge rally,” The trader stated .

DOGE Price Analysis: More Pain Ahead

From a technical point of view, the Relative Strength Index (RSI) on the daily chart remains below the neutral line. This indicates that the momentum around DOGE is bearish.

Likewise, the Awesome Oscillator (AO) has yet to rise past the zero signal line despite flashing green histogram bars. If this trend continues, Dogecoin’s price could face another decline.

In addition, CCN observed the formation of a bear flag in the same timeframe. A bear flag is a pattern characterized by two downward movements separated by a brief consolidation, after which the downtrend resumes.

Considering this position, DOGE is likely to drop another 30%. If this is the case, the meme coin’s value might trade at $0.18 soon.

However, if DOGE breaks above the upper trendline of the flag, this might not happen. In that scenario, the cryptocurrency’s value could rise to $0.40 at the 0.786 Fibonacci level.