Dogecoin has been falling for the past few days amid bearish sentiment across the crypto market. Despite the drop, memecoin is currently overvalued due to growing speculation surrounding the upcoming launch of Grayscale’s Dogecoin ETF (GDOG).
This hype could turn into significant trading volume on Monday, potentially changing DOGE’s near-term outlook.
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Dogecoin’s NVT ratio has risen sharply, indicating a disconnect between reputation and on-chain activity.
This ratio compares market capitalization to trading volume, and a spike usually indicates limited usefulness of the trade relative to price. Although DOGE has garnered social attention and widespread support, actual trading volume has not kept pace.
This discrepancy often leads to overvaluation and, in bearish situations, can cause a decline.
However, the timing of this surge coincides with the anticipated launch of Grayscale’s Dogecoin ETF. The ETF is expected to attract significant capital inflows, which could reset the NVT ratio and restore balance between prices and on-chain activity.
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Macro indicators also give a bright picture. Dogecoin’s activity index has been rising in recent days, indicating an increase in HODLing behavior among long-term holders.
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If the coin remains dormant for a long time without being spent, it becomes lively, suggesting that the keychain is defending its position.
This trend is especially important during economic downturns. Long-term holders often resist volatility caused by short-term traders and act as the backbone of price stability.
Their continued belief reduces the risk of sudden declines and demonstrates confidence in Dogecoin’s ability to recover if market conditions change.
DOGE price may skyrocket
Dogecoin is trading at $0.143 and holding near the $0.142 support level. Memecoin is still stuck in a month-long downtrend that has repeatedly failed to break out. In the current bearish environment, recovery will be difficult without significant catalysts.
The launch of the DOGE ETF could be the catalyst. A successful debut could pave the way for DOGE to surpass $0.151 and reach $0.165. A move of this magnitude would invalidate the downtrend and signal a change in momentum supported by new inflows.
If the ETF hype does not translate into buying pressure, Dogecoin could extend its decline. There is still a possibility of a decline towards $0.130.
However, if DOGE does not face such a steep decline, it could continue to struggle below the $0.151 resistance level, prolonging the ongoing downtrend.
