Dogecoin Hits $0.40 Hurdle as Long-Term Investors Continue to Sell
Date: 2024-11-20 Author: Henry Casey Categories: CRYPTO PAYMENTS
Following a recent three-year high of $0.43, Dogecoin has quickly fallen to $0.38. According to on-chain analysis, the sharp jump in price has triggered selling of assets, especially among long-term investors. If this trend continues, the cryptocurrency could lose a significant portion of its positions.
Long-Term Holders Sell Assets
Dogecoin’s average coin age has decreased by 1% in the past week, according to Santiment. This indicator shows the average length of time coins are held before they are moved or sold. A decrease in the value indicates that older assets are starting to be sold off more actively. Such dynamics are usually perceived as a bearish signal, indicating that investors are taking profits.
In addition, the current Market to Realized Value Ratio (MVRV) is 232.36%, which indicates that the market price is significantly higher than the average realized value. MVRV allows you to assess the degree to which an asset is overvalued. A positive value of this indicator often pushes investors to sell, since high profits seem attractive for fixing.
The current MVRV value for Dogecoin suggests that asset owners could receive an average of 236% profit if they sold their tokens at the current market price. This creates additional risks for the memecoin price, since a high MVRV is traditionally associated with the likelihood of a price correction.
Possible Scenarios for DOGE
At the moment, the Dogecoin price remains slightly below the resistance level of $0.39. If selling continues, the price may fall to $0.31, and if this mark is broken, to $0.30 or even $0.21. This scenario will significantly complicate the prospects for the price to return to $0.47 or, even more so, to $0.50, the level last reached in May 2021.
However, a positive change in market sentiment and holding assets by long-term investors could play in favor of the memecoin. If demand for Dogecoin increases, the price could overcome the resistance at $0.47 and rush to the $0.50 mark.
