Dogecoin Price Hinting At Potential Short-Term Reversal Amidst Bearish Trend
Read on to examine Dogecoin's recent market trends, on-chain metrics, and price projections to understand its potential performance in 2023 better.
25 MAY 2023, 4 min read
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Key Takeaways

  • Dogecoin has shown a bearish trend, but certain technical and on-chain indicators hint at possible short-term reversal tendencies.
  • When investing in Dogecoin, analyzing multiple factors, including market sentiment, technical indicators, on-chain metrics, and correlations with other cryptos like Bitcoin, is essential.



24H Price Change


7D Price Change


Market Cap


Circulating Supply


Trading Volume




Let's begin by taking a long-term view of Dogecoin's performance. Since peaking in May 2021, this beloved 'meme' crypto has been on a downward trend for about 18 months, showing a pattern known as a descending channel. A descending channel is a price trend characterized by two parallel downward lines. It's like a 'market rut,' but this pattern signals cyclical behavior and could imply a potential price reversal.

As a result, in October of last year, Dogecoin broke out from this rut in a bullish rally, but the momentum could not be sustained for long. The market fell into a pattern known as a 'falling wedge,' indicative of bearish domination in the market. However, recently, the price reversed from the $0.07 horizontal support, coinciding with the lower trendline of the rising wedge.

Source: TradingView

Price patterns alone don't tell the whole story, so we turn to market momentum indicators like the Exponential Moving Average (EMA). Think of the EMA as a temperature gauge for market momentum, with the 20-day and 200-day EMA being the most commonly used. Unfortunately, the price has declined below these averages, with a bearish crossover further strengthening the bearish momentum.

This brings us to another crucial metric, the Relative Strength Index (RSI). It's an oscillator that measures the speed and change of price movements, with 50 as the neutral point. Recently, the RSI dipped below 50, signaling a bearish market, but a resurgence above 50 could signify a potential bullish turn.

Lastly, consider the On-Balance-Volume (OBV), which combines price and volume to show the total buying and selling pressure. An interesting observation is a bullish divergence, where the OBV shows lower lows while the price displays higher ones.

Also Read: Shiba INU Technical Analysis

Dogecoin's On-Chain Metrics: An Overview

Understanding daily active address count (DAA) is crucial as it measures network activity, representing the unique addresses engaging in transactions on a given day. Historically, Dogecoin's price has been sensitive to DAA spikes, suggesting a strong correlation between network activity and price.

Source: Messari

Recently, Dogecoin's DAA saw a significant spike in the second week of May. However, the price has yet to catch up, as it has been on a downward trend.

This divergence brings us to another important metric: the hash rate. In simplest terms, a higher hash rate signifies a healthier and more secure network.

Source: Messari

Over the past few months, Dogecoin's hash rate has shown an uptrend, suggesting increased network activity. However, this uptick hasn't resulted in a corresponding price rise, indicating a divergence between network health and price. In summary, while the overall sentiment leans bearish, a sustained oversold position could pave the way for a potential price reversal.

Dogecoin Price Projection for 2023

Drawing from our analysis, Dogecoin is lingering near the Exponential Moving Average (EMA) markers and appears to be in a low volatility phase. Low volatility means the price fluctuations are minor for the time being. However, this could also mean a period of high volatility looming, which could cause dramatic price swings.

With this backdrop, a solid rebound from the $0.07 support might trigger a near-term price rise. A key indicator for buyers would be the potential close above the 20/200 EMA, signaling a possible trend shift. Moreover, any closure above the $0.083 mark could trigger a bullish break, enabling buyers to regain control in the short to medium term.

On the flip side, if the Relative Strength Index (RSI) recovers above 50, it could indicate a strong comeback and potential trend reversal. However, in a bearish scenario, any closure below the $0.07 baseline could lead the coin into a bearish price discovery, with the first significant support level around $0.055.

Ultimately, it's essential to collectively view all these factors - market sentiment, technical analysis, and on-chain metrics- rather than in isolation when making investment decisions.

Also Read: AVAX Technical Analysis

Is Investing in Dogecoin Right for You?

After a comprehensive analysis, it's clear that investing in Dogecoin comes with its share of risks and opportunities.

The overall sentiment leans bearish, but indicators like bullish divergence in On-Balance-Volume (OBV) and potential reversal patterns could present opportunities. It's critical to closely monitor market momentum indicators like the EMA and RSI and on-chain metrics like DAA and hash rate for well-informed decisions.

Importantly, given Dogecoin's high correlation with Bitcoin, tracking Bitcoin's movements could also provide valuable insights. The Okto DeFi mobile application delivers a secure wallet solution for holding coins, including DOGE tokens. It grants users access to an extensive array of DeFi investment prospects, all consolidated within a platform.

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