Dogecoin (DOGE) saw its price increase by more than 10% a few days ago. However, the trend did not last long as the meme token soon witnessed a price correction, negating its weekly gains. Additionally, one of the blockchain’s fundamental metrics rose sharply.
The Elon Musk Effect on Dogecoin
Recently, Elon Musk opened an official Payments account, which created excitement in the community and led to an increase in DOGE’s price. However, experts had previously suggested that the excitement surrounding Payments might not be enough to sustain Dogecoin’s price rise. As the meme token’s price fell, this situation seemed to strengthen.
According to data from 21milyon.com, DOGE has experienced a decline of about 4% in just the last 24 hours. Although the meme token’s price movement shows a downward trend, one of its fundamental metrics has remained high for several months. IntoTheBlock recently shared a tweet highlighting how Dogecoin’s transaction count has remained high compared to other leading cryptocurrencies like Shiba Inu (SHIB). Analysts’ studies on Dogecoin’s metrics revealed that the high transaction count might not be enough to compensate for the meme token’s losses. DOGE’s social volume remained high last week thanks to high price volatility.
DOGE Price Analysis
However, since January 22, the downward trend has begun to increase, as clearly indicated by the decline in weighted sentiment. Dogecoin’s liquidation heat map also revealed some interesting points. It is indicated that there is a critical support level around $0.079 for the meme token. This suggests that the DOGE price could drop to this level before rising.
If the cryptocurrency’s price does not test the mentioned support region, investors may witness further declines. On the other hand, considering a more optimistic scenario, if DOGE’s price rises, it could encounter strong resistance near $0.09. Additionally, the Bollinger Bands have pointed out that the DOGE price is in a less volatile region. This could signal that the meme token’s price might reach the support level and initiate another rise from this area.