Dogecoin Chance to Break 5-Month Downtrend May Fail

Dogecoin (Doge) price has been in a downtrend for more than five months, with the meme coin struggling to break out. Recent price action suggests that a Doge breakout may not happen anytime soon.

This is because market indicators are showing signs of overvaluation, putting Doge's bullish hopes at risk.

Dogecoin faces big challenges

The GIOM indicator shows significant resistance at $0.108. This area is important because over 48.3 billion Doge, worth over $5.2 billion, was purchased between $0.104 and $0.137. Investors holding in this range are likely to sell as soon as they see profits, creating a large supply wall that could hinder the upside.

With such resistance, Doge will need strong support from the broader market to break above $0.108. Until then, excess supply will likely hold back prices, preventing the meme coin from achieving a meaningful breakout above this level.

Additionally, the NVT ratio, which has been rising since early August, suggests that Dogecoin may be overvalued. The indicator compares the asset’s market Capital to its volume , and a rising ratio suggests that value is outpacing network activity. This trend is concerning for Dogecoin, as it often precedes a correction. Overvaluation, combined with low volume , is often a sign that the price may be headed for a drop.

Doge Price Prediction : Keep Going Up

Dogecoin is currently trading around $0.104 and faces the dual challenge of breaking a five-month downtrend and overcoming resistance at $0.108. Given the signals from the broader market, this may not be possible in the short term. The possibility of accumulation below the $0.108 resistance remains high. This is because the signals from the broader market are not strong enough to spur a significant rally. Doge is likely to range between $0.108 and $0.091 in the near future.

However, if broader market conditions improve and investors hold their positions instead of selling, Dogecoin could break above $0.108. This would open the door for a 16% rally to $0.122, potentially invalidating the bearish view.

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