Analytics platform Santiment is saying that Dogecoin (DOGE) still possesses more upside potential even after surging by over 30% earlier this week.
Santiment’s director of marketing Brian Quinlivan says that Dogecoin’s market value to realized value (MVRV) over the past 30 days is below the “danger zone,” meaning the leading meme coin likely still has some upside potential.
MVRV is the ratio of the prevailing price and the average price – the higher it is, the higher the likelihood of the asset coming under selling pressure.
“As for average trading returns, we can see that the 30-day MVRV is sitting at +11%. Typically when altcoins hit +20% or more, this is a ‘danger zone’. Considering it didn’t quite get that high, even with the massive Elon-induced price surge, there could still be some extra cushion for prices to rise further.”
Quinlivan, however, warns that signs of the meme coin hitting a local top have emerged after the recent rally and this includes a spike in three metrics – Dogecoin’s active addresses and circulation, trading and transaction volumes as well as whale transactions.
“When these three metrics all spike together during a time when the asset is going on a decoupled surge independent from the rest of the markets, it’s a pretty solid bet that a local top is nearly always forming here, and profit taking yourself is a wise decision.”
Santiment’s director of marketing also says that Dogecoin’s price action after this week’s surge does not inspire confidence.
“Looking at this chart, though, it’s hard to get too excited that we’re suddenly seeing a bit [of a] correlation break, with ‘lower highs’ consistently being made even in the hours past yesterday’s pump. ‘Higher highs’ would be a much more solid indication that a bigger rally will be commencing soon.”
DOGE is trading for $0.0858 at time of writing.
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