Dogecoin’s social sentiment is bleak, raising concerns about a possible price reversal.
Dogecoin (DOGE) has been in the midst of a controversy following the US Securities and Exchange Commission’s (SEC) lawsuit against major exchanges Binance and Coinbase. The media has been spreading fear and uncertainty regarding the legal proceedings, which has led to a significant drop in the meme coin’s market capitalization. However, the on-chain data shows that the long-term supporters of the Dogecoin community remain loyal in their support. Despite the media’s dwindling coverage and the calming of the storm, a question arises whether this is an opportune moment for bullish investors to take advantage of the dip and spur yet another impressive price rebound for DOGE.
According to detailed on-chain analysis, it appears that the recent sell-offs and price drops in DOGE were primarily driven by short-term traders rather than committed long-term holders. A comprehensive Santiment chart illustrates this phenomenon, showcasing a notable increase in Mean Coin Age within the Dogecoin ecosystem during the same period when massive sell-offs occurred. Examining the data between June 1 and June 9, the Mean Coin Age for DOGE has experienced a 5% increase, rising from 54,317 to 57,219. This upward trend in Mean Coin Age during a period of price retracement serves as a promising signal, indicating growing confidence among long-term DOGE holders. Remarkably, approximately 70% of the total circulating Dogecoin supply is currently held by steadfast long-term investors who have held their positions for more than a year. With such a significant portion of DOGE in the hands of committed holders, it follows logically that if they continue to hold onto their coins, the price of DOGE is likely to rebound in the near future.
Over a span of just four days, from June 5 to June 9, the Social Volume of DOGE has witnessed a staggering decline of 72%, plummeting from 8,219 mentions to 2,308. When Social Volume experiences a substantial decrease like the one observed above, it signifies that many stakeholders are currently overlooking the asset. This situation presents an opportunity for strategic investors seeking to capitalize on market bottoms. It is common for bullish investors to strategically enter the market when sentiment hits a new low, aiming to purchase assets at their lowest possible value.
Interpreting this drop in Social Volume as a potential turning point for the DOGE price dip, optimistic investors may consider this as an encouraging signal. If this bullish outlook materializes, the crypto community believes that DOGE will regain its upward momentum and ascend the charts once again in the days to come. As of now, CoinGecko reports the current price of DOGE at $0.060480, down 11.3% in the past 24 hours. The cryptocurrency has likewise experienced a decline of 16.7% over the course of the last seven days.
