Dogecoin (DOGE) Price Rebound: On-Chain Buy Signal Emerges

Dogecoin (DOGE) has witnessed a considerable price decline in the last month. Exchanging hands at $0.11 as of this writing, the value of the leading meme coin has decreased by 25% in the past 30 days.

However, for traders looking to trade against the market, a key on-chain metric has flashed a buy signal .

Dogecoin’s MVRV Ratio Says Now is a Good Time to Buy

Dogecoin’s Market Value to Realized Value (MVRV) ratio, analyzed over 30-day and 365-day moving averages, currently shows negative values. At the time of writing, the MVRV ratios for DOGE stand at -16.83% for the 30-day average and -10.96% for the 365-day average.

An asset’s MVRV ratio tracks the ratio between its current market price and the average price at which all its coins or tokens were acquired. 

When its value is above one, it signals that the asset is overvalued. This means that the current market value is significantly higher than the price at which most investors acquire their holdings.

On the other hand, when an asset’s MVRV ratio is below zero, the asset is undervalued. It suggests that its current price is less than the average purchase price of all its tokens that are in circulation. 

Many view it as a buy signal because a negative MVRV connotes the asset trades at a discount relative to its historical cost basis. DOGE whales might have caught on to this, as they have begun to increase their accumulation. 

For example, there has been an uptick in the daily count of large transactions in the last month. The number of DOGE transactions worth above $10 million has increased by over 150% in the past 30 days. 

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When the large holders of an asset increase their trading activity during a period of price decline, it often signals that they see a buying opportunity and are accumulating in anticipation of a price rally .

DOGE Price Prediction: The Coast is Not Clear Just Yet

Despite DOGE’s key on-chain metric flashing a buy signal and whales’ notable accumulation, the meme coin’s price may continue to decline. 

The coin’s price has been below its 20-day Exponential Moving Average (EMA) since June 7. 

An asset’s 20-day EMA measures its average price over the past 20 trading days. When the price falls below this level, it signals a decline in buying pressure. This is a bearish signal that suggests high selling pressure in the market. 

However, readings from DOGE’s Relative Strength Index ( RSI ) offer some respite. At press time, DOGE’s RSI is 29.41. 

The RSI measures an asset’s overbought and oversold market conditions. It ranges between 0 and 100, with values above 70 suggesting that the asset is overbought and due for a price correction. In contrast, values below 30 indicate that the asset is oversold and may witness a rebound.

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If a rebound occurs, DOGE’s price might rally toward $0.13.

However, if the bearish bias gains momentum, this projection will be invalidated, and the coin’s price may fall under $0.11 .