- Dogecoin, at press time, appears poised to break a critical support line
- On-chain metrics highlighted significant bearish sentiment across the market
Dogecoin [DOGE]At press time, it is trading near the bottom line of its horizontal channel, within which it has been trending since April 13.
A horizontal channel is formed when the price of an asset consolidates within a range for a period of time. The upper line of this channel forms resistance, while the lower line forms support. As for DOGE, the bears appear to have created resistance at $0.17, while the bulls defended the coin’s price at $0.12 – forming long-term support.
Source: Trading View
DOGE Bears are taking over
If the bulls fail to defend this support level, DOGE price could fall to new lows on the charts. This means that the market has become flooded with selling activity.
Evaluation of a few on-chain metrics hinted at the possibility of this happening. For example, memecoin weighted sentiment has been primarily negative since March 31st.
Source: Santiment
This measure measures the overall market sentiment regarding the asset. When a negative value returns, the asset’s market is overwhelmed by negative sentiment, and its price is expected to decline.
DOGE’s weighted sentiment is still below zero at press time -0.17. If weak sentiment continues to trail the memecoin, it will put downward pressure on its price. This may lead to it falling below the support level.
In addition, the overall market demand for DOGE has also declined. In just the last 30 days, the average daily number of addresses that completed at least one transaction involving the popular memecoin fell by 13%, according to Santiment.
Source: Santiment
To prevent further losses on their investments, DOGE whales have gradually reduced their exposure to memecoins over the past month. according to IntoTheBlock’s According to the data, the daily number of large DOGE transactions has decreased significantly over the past 30 days.
Consider this – the number of DOGE transactions worth between $100,000 and $1 million has fallen by 46% over the past month. Likewise, larger transactions between $1 million and $10 million fell by 39.1% during the same period.
Source: IntoTheBlock
DOGE Futures traders remain firm
Despite Dogecoin’s poor price performance, futures traders remain mostly bullish.
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according to QuinglassAn assessment of the currency’s funding rate revealed that apart from the negative values recorded from June 18-19, it has remained positive over the past two months.
Source: Coinglas
Funding rates are a mechanism used in perpetual futures contracts to ensure that the contract price remains close to the spot price.
When an asset’s funding ratio is positive, it indicates that there is more demand for long positions. This means that more traders are buying coins in anticipation of a rise in prices, than those who are buying in anticipation of a decline.
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