Dogecoin’s (DOGE) stock-to-flow ratio saw a noticeable increase between August 18 and 19, catching the attention of market observers. This increase marked a significant shift for the meme coin, which had recently experienced notable declines. As of the time of writing, DOGE is trading at $0.1007, reflecting a 40% drop over the past 90 days. However, analyses suggest a price rally for DOGE might be on the horizon.
Will Dogecoin Rise?
The stock-to-flow ratio is a model that measures how low the circulating supply of a cryptocurrency under review is. For instance, if there is a decline in this indicator, it can be interpreted as high inflation for the cryptocurrency under review and a risk of price decline.
Santiment data shows Dogecoin’s stock-to-flow ratio was at 69.25, marking an all-time high for this metric. This unusual rise can be seen as a positive signal for DOGE’s price, indicating a supply squeeze for the cryptocurrency.
A supply squeeze in crypto can occur when demand for a coin increases during a scarcity period. Based on the metric, analyses suggest that DOGE’s price could see a noticeable rise in the coming weeks. In addition to the supply fluctuations, both active and new addresses on the Dogecoin network have increased since last week.
Consequently, the increase in the number of active and new addresses strengthens the idea that the meme coin’s price could soon recover from its recent downward trend.
How Much Will DOGE Be Worth?
Dogecoin’s Global In/Out of Money (GIOM) indicator also provides important insights. This indicator is used to examine whether addresses that have already purchased a cryptocurrency are in profit, loss, or break-even based on their purchase costs and current prices.
As of the time of writing, analyses show that over 1 million addresses purchased 11 billion DOGE at a maximum price level of $0.098. Additionally, it is not incorrect to say that the accumulation between $0.12 and $0.15 marks a higher level. Therefore, if buying pressure increases, DOGE could move above these resistance points.
DOGE could rise to $0.15, indicating an approximate 50% increase if the uptrend starts. However, if this level is not breached and the trend remains downward, DOGE’s price could drop to $0.088.
