- Chances of a Dogecoin bounce in the short term increased as BTC climbed back above $106k
- Distribution phase of Dogecoin, even though the MVRV ratio was negative, signaled low bullish confidence
Dogecoin [DOGE] suffered a setback last week when it faced rejection at a key resistance level at $0.2. Since then, it has dipped to the local low at $0.17. On Monday, Bitcoin [BTC] rallied from $105.6k to $108.4k – A 2.72% gain at the time of writing.
More gains could follow, but the macroeconomic situation appeared as bleak as it did last week. Plus, the tensions in the Middle East seem to be far from a resolution. Amid this somber backdrop, the leading memecoin’s price action has not changed from a bearish bias for long-term investors.
A recent report by AMBCrypto highlighted the state of the expectant state of altcoins. The perpetuals market appeared to be gearing up for something big. About 70% of altcoins across the board saw notable long bias, and large-cap assets saw 60% of traders leaning long. In fact, they expected a recovery after last week’s liquidation cascade.
Should DOGE traders shift their bias bullishly as well?
Dogecoin retains its bearish tinge for investors
In a post on X, crypto analyst Ali Martinez observed that the TD Sequential flashed multiple buy signals on the 12-hour chart of Dogecoin. However, as pointed out in an earlier analysis, the HTF bias of Dogecoin has remained bearish.
Heightened selling pressure on the OBV, combined with the bearish momentum of the RSI and the bearish structure, meant that a breakout beyond $0.2 may be exceedingly difficult.
Source: Santiment
A closer look at the behavior of Dogecoin holders of six months or younger showed that a distribution phase was underway. The mean coin age, which measured the average number of days that all DOGE tokens have stayed in their current addresses, has been trending southbound for just over five weeks now.
This downtrend meant Dogecoin was being transferred from holding addresses, likely for selling. The dormant circulation spikes over the past month also highlighted the flurry of on-chain activity.
Meanwhile, the 180-day MVRV ratio has been negative even as the leading memecoin entered a distribution phase.
This could be a discouraging sign for investors. As per the TD Sequential and the bounce in Bitcoin, traders might want to go long, but investors should remain wary.
