- Dogecoin’s MVRV Ratio has dropped below its 200-day moving average which has led to major losses before.
- The last two times this happened Dogecoin lost 26% and 44% making traders nervous about another drop.
- Unless strong support holds Dogecoin may face another big sell-off as market signals point to a possible decline.
Another bearish call has emerged for Dogecoin ($DOGE) with its Market Value to Realized Value (MVRV) Ratio going below its 200-day moving average (MA). This pattern, called the death cross, has historically been a precursor to hefty price drops.
The recent event was noted by crypto analyst Ali (@ali_charts) on X (Twitter), citing that the last two times this pattern emerged, DOGE prices dropped by 26% and 44%, which means that if the history repeats itself, Dogecoin could be heading another steep decline during the next few weeks.
MVRV Ratio Drops Below Key Level—A Sign of Increased Selling Pressure
The MVRV Ratio, a crucial on-chain metric evaluating profits and losses for holders, has now fallen below its long-term trendline which has historically resulted in some severe selling pressure as investors have liquidated their positions before prices fall further. The first occurrence of this infamous crossover happened in October 2023, which saw the price down 26%. The second crossover was in August 2024, resulting instead in a much steeper 44% crash.
Hence, the reiterative trend seems to suggest that whenever the MVRV Ratio dips below the 200-day MA, recovery has proved elusive for DOGE, thereby dragging out extended weak price periods. But as sentiment shifts, observers are watching closely to see whether Dogecoin will break this historical trend and avert a similar bearish path.
DOGE’s Current Position: A High-Risk Scenario?
Currently, Dogecoin has a trading price of approximately $0.268, with an MVRV Ratio of 78.36% and a 200-day MA of 91.01%. The increasing divergence that is widening between these figures corresponds with earlier downturns, generating jitters concerning yet another significant price correction. Therefore, if DOGE were to follow the same historical model, traders will see another substantial fall reinforcing bearish market momentum.
The death cross between the MVRV Ratio and the 200-day MA has been an accurate indicator of price weakness in the past, making this event particularly concerning for traders. Unless DOGE finds strong support levels, the risk of further declines remains high.
Will DOGE Defy the Bearish Outlook?
Despite Dogecoin’s speculative price surges in the past, on-chain data suggests caution. The MVRV Ratio has consistently acted as a leading indicator for price movements, and its latest drop signals potential downside pressure.
Unless there suddenly occurs a demand surge, DOGE’s technical structure is weak, adding to the probability of falling into another bearish phase. Given the expected volatility, the upcoming days will be key to determining whether Dogecoin can turn itself around or is destined for another painful drop. Traders and investors should brace for turbulence, as history suggests. According to historical patterns, the events ahead seem likely to prove relatively tough for DOGE.
