- Dogecoin is currently experiencing a retracement phase, indicating potential further losses in the upcoming weeks
- On-chain metrics are showing accumulation signals, suggesting that investors may consider increasing their DOGE holdings
Despite the cryptocurrency market trying to stabilize after a turbulent week, Dogecoin (DOGE) continues to struggle. Bitcoin (BTC) has been following a pattern of significant drops towards the end of the week, followed by a weekend range and a recovery at the start of the week since May 23.
If this pattern continues, Monday may bring more of the same, giving Dogecoin a chance to initiate its own recovery. However, the current price action remains bearish.
Source: DOGE/USDT on TradingView
The market structure for Dogecoin is bearish, with the price below the 78.6% Fibonacci retracement level based on the early May rally. There is a liquidity cluster at the local low of $0.17, indicating a possible dip to this level before any recovery.
While some on-chain metrics suggest a buying opportunity, the sustained selling pressure highlighted by the OBV indicates seller dominance.
Dogecoin Shows Positive Signals for Buyers, but Expect Volatility
The Network Value to Transactions Signal (NVTS) metric, a modified version of the NVT ratio, indicates that Dogecoin is currently undervalued, presenting a potential buying opportunity for investors.
Furthermore, the exchange net position change for Dogecoin turned negative in early June, suggesting accumulation as DOGE moved out of exchanges, reducing the available supply for selling.
Despite these positive signals, traders should remain cautious and prepare for a retest of $0.17 and possible further losses. Investors can consider buying opportunities and implement strategies like dollar-cost averaging.
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