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- Dogecoin’s Market Value to Realized Value, or MVRV ratio, has dipped to a level that has previously presented a buying opportunity as it usually precedes a bullish run.
- Dogecoin’s bullish metrics, such as the number of transactions above $10 million, have skyrocketed recently, indicating whales are preparing for the impending rally.
After several months of new highs, the meme coin market has slowed down recently. Dogecoin, the sector’s top coin, hasn’t been spared—in the past month, DOGE has lost a quarter of its value. However, one key metric indicates that it might be about to reverse course and embark on a bull run.
DOGE trades at $0.1253, gaining around 6% in the past day, the highest rally in the top ten coins as its fortunes changed. With a market cap of $18.14 billion, it remains the largest meme coin and the ninth-largest crypto overall.
Despite the recent gains, DOGE has been down by over 25% in the past month and 33% in the past 90 days.
However, analysts claim the tides could be about to change for DOGE, pointing to its Market Value to Realized Value, or MVRV ratio. This metric assesses the prevailing value of an asset relative to the perceived fair value. The latter is an average of the price at which the tokens in supply were acquired.
If the MVRV ratio is high, the asset is likely overvalued and will dip. However, when the ratio is low or negative, the asset is considered undervalued, and it presents a great buying opportunity for savvy investors.
According to data from Santiment, Dogecoin’s MVRV ratio has dipped significantly recently and has stood around -15% for the past 30 days. This shows that the asset is undervalued and could be about to shoot up soon.
Dogecoin’s MVRV ratio has presented traders with similar opportunities in the past. For instance, in mid-March this year, the ratio dipped significantly after DOGE lost about a third of its value in a few days. Shortly after, the meme coin reversed the trend and went on an 80% surge that pushed its price to $0.2262 in about two days,
Institutional investors usually capitalize on this metric; the current market is no different. Data from IntoTheBlock shows that transactions above $10 million in the past month have spiked by around 150%, indicating that the whales have been scooping up DOGE in anticipation of a looming price rise.
The relative strength index (RSI), which has dipped below 30, further supports the MVRV metric, indicating that the token is in a buy zone.
However, some technical indicators show that DOGE may not be ready to break out just yet. For instance, its price remains below the 20-day exponential moving average (EMA), which usually indicates bearish pressure.
