- Dogecoin’s price could fall to $0.12 due to stagnant development activity, low liquidity, and a significant decline in active addresses.
- Positive Cumulative Liquidation Levels Delta (CLLD) values and low market support also contribute to the bearish outlook for DOGE.
Dogecoin (DOGE), the cryptocurrency that started as a joke but evolved into a major player in the crypto world, is currently facing a challenging phase. Despite its popularity and a history of surprising surges, there are signs that DOGE might not see significant gains in the near future. Here’s why the beloved meme coin could still fall to $0.12.
Development Activity and Its Impact
Contrary to what many might think, development activity plays a crucial role in the valuation of Dogecoin. According to AMBCrypto, this metric, which measures the rate at which developers improve the network, has been stagnant since April 24. Historically, an increase in development activity has coincided with price hikes. For instance, in February, the development activity surged, and DOGE’s price jumped from $0.08 to $0.14. A similar trend was observed between October and November 2023.
However, with development activity remaining flat, DOGE has been consolidating between $0.13 and $0.16. This stagnation suggests that without a renewed surge in development efforts, DOGE might struggle to achieve any significant upward momentum.
Liquidation Levels and Market Liquidity
Another critical metric to consider is the liquidation levels, which indicate price points where traders’ positions might be forcefully closed. AMBCrypto noted that the liquidation points between $0.15 and $0.16 are sparse, indicating low liquidity. This lack of liquidity means there is less market support to drive the price upward, potentially leading to a sideways or even downward movement.
In a worst-case scenario, this could drive DOGE’s price down to $0.12, especially if the market continues to see low liquidity levels.
Cumulative Liquidation Levels Delta (CLLD)
The Cumulative Liquidation Levels Delta (CLLD) provides further insight into potential price movements. Positive CLLD values suggest more long liquidations, which could lead to price declines. At present, the CLLD is positive, indicating a possible full retrace for Dogecoin. This aligns with the bearish prediction of a fall to $0.12 if the current conditions persist.
Decline in Active Addresses
Finally, the number of active addresses on the Dogecoin network has seen a significant drop. Currently, there are 54,600 active addresses compared to over 250,000 three months ago. This decline in network activity is another bearish indicator, suggesting reduced user engagement and transaction volume. Lower activity levels could hinder DOGE’s ability to achieve exponential growth, further supporting the potential decline to $0.12.
Dogecoin’s future is uncertain, and while it has defied expectations in the past, several key indicators suggest a bearish outlook. Stagnant development activity, low liquidity, positive CLLD values, and a decline in active addresses all point towards a potential fall to $0.12. For investors and enthusiasts, keeping an eye on these metrics will be crucial in anticipating Dogecoin’s next move.
